Why UAE residents don’t have enough savings despite paying little to no taxes

Why UAE residents don’t have enough savings despite paying little to no taxes

Here's how you can save up

Published: Sun 28 Aug 2022, 2:27 PM Last updated: Sun 28 Aug 2022, 2:28 PM

Residents of UAE benefit from very low to no taxes however, most of them are still unable to save.

This is due to a rise in non-essential spending, increasing debt burdens to live up to their ‘Dubai standards’ when they can’t really afford it.

Personal finance experts blame overspending by the millennials, lack of financial literacy among average households, missing or low returns and rewards on savings products, and easy access to no-cost credit or buy now pay later (BNPL) products as well for low saving rates in the country.

“Money management is complicated, and savings ask for a lot of discipline. Most banking products do not engage with their young households in a way that could excite them. Savings need to be more rewarding than accumulating debt,” says Purvi Munot, Founder and CEO Sav Money.

Munot says conspicuous wealth in the UAE is contagious.

“When people see others living the high life, they try to buy it for themselves, even when they can’t afford it. Middle-class households have increasingly shifted their spending from ‘essentials’ — fuel, utilities, rent and groceries — to ‘aspirational indulgences’ like