Organising finances should be the first priority, new expats are advised

Guardian Wealth Management outlines essential savings tips for newly arrived migrants to get the most out of their time in the UAE

Dubai, UAE, September 28, 2016:  According to the most recent figures, around 90% of the UAE’s population is made-up of non-natives and the Emirates currently remains an attractive destination for migrants looking for a better way of life and tax-free salary.

September in particular sees a surge in numbers, with many expat families’ arrival dictated by the commencement of the brand-new school year.

“With the UAE’s liberal and economically-friendly environment, it has positioned itself as a prime location for expats from across the world. This is proven by the recent HSBC Expat Explorer Report which ranks UAE as the 12th most attractive country for expatriates, beating the likes of Hong Kong, Qatar and KSA”, says Hamzah Shalchi, Regional Manager of Guardian Wealth Management.

A large part of the UAE’s appeal is the ability for people to improve their earnings, which in turn means a higher disposable income but most importantly, the increased potential to save. In fact, according to HSBC’s report, 52% of UAE expats said the move had increased their ability to save towards long-term investment goals (14% above the global average).

However, despite the statics, the reality can often tell a different story.

“Regardless of the prime opportunity being an expat in the UAE presents and the positive intentions when people first arrive, we have found that in practice the reality is much different. Yes, people are earning more, but the temptations of a more luxurious lifestyle are seeming to outweigh the prospects for a better future”, explains Shalchi.

“Therefore we are urging expats, and particularly newly arrived expats, to make saving a priority and have outlined a number of personal finance tips that can get them started”.

1. Set a financial goal and structure early

Saving can often be a daunting task and it can be hard to prioritise what is the most essential. Retirement, property, kids’ education… they are all important and need to be contributed to. The idea is for savers to do solid calculations based on incomings and outgoings and come up with an achievable savings contribution each month that can be adhered to. Once a plan is in place it is important to optimise those savings with the best products and options around. Ultimately money should make money.

2. Make the most out of your pensions
When many expats move abroad they continue to pay into pension funds in their home countries, meaning they are eligible to pay income tax on the fund once they move back home. There are a number of tax-efficient savings vehicles on offer and international workers should consider transferring their pension into Qualifying Recognised Organised Pension Schemes (QROPS) under professional advice to receive benefits such as increased lump sums and greater investment freedom.

3. Invest long term
One of the key rules of investing is not timing in the market but time in the market. Savers should be thinking of their investment goals long term as the longer an investment is held, the greater the probability of receiving desired returns. A loss is not a loss until it is sold at a reduced rate.

4. Plan for life and death
It’s a morbid subject but death and critical illness cover is essential as an expat to protect families in the event of a tragic accident. Insurance can protect loss-of-earnings if the main breadwinner is put out of action and also covers expensive costs such as funeral fees. Additionally, in a country such as the UAE which operates on Sharia Law, passing on wealth after a death can be tricky if an offshore will is not in place. There are many options available to ensure hard-earned monies are protected.

Although these are some great tips to get people started, ultimately each case is unique and people should seek professional financial advice to get the most out of their expat status.