The prologue: Michael, a young, up-and-coming British project manager in the oil sector, arrives in Dubai with his wife Antonia, about to embark on the next chapter of their life together as expatriates.
Seduced by the salary, the climate, the beautiful beachfront apartment (paid for by the company), and the promise of an early retirement, their future appears on course.
For many years Michael and Antonia enjoy life as if they are on holiday, attending as many weekend brunches and social events as possible. They dress to impress in the season’s latest designer wear and are regulars at many of Dubai’s top restaurants.
Soon two become four as their daughters are born, with the couple deciding to remain in Dubai until after the children’s education is completed.
But lurking in the shadows, a dark truth prepares to deprive of them of the future they’ve taken for granted.
Dramatic pause for some numbers:
According to the UAE’s annual National Bonds GCC Savings Index, 65 per cent of residents (locals and expats) do not save any money on a regular basis;
Of those who do save, 45 per cent of all people surveyed save 10 per cent or less of their income;
The reasons why those who save do so are mostly education fees and retirement.
The villain revealed: Time flies when raising a family and soon their children are attending élite universities. The outgoings have increased significantly year on year but they want to continue to keep up appearances within social circles, so the majority of incoming earnings are fast spent.
Now in their late 40s, they realise the promise of an early retirement at 55 hes become a pipe dream, and Michael and Antonia are left considering how they will pay for things such as their daughters’ weddings, and a potential move back to the UK. Their concern can now be seen etched into their foreheads.
They wonder where they went wrong, what they failed to do and why they didn’t take action sooner.
4. Perhaps we should all ask ourselves this question: “If I want to maintain my current lifestyle (or have the lifestyle I aspire to) in retirement what must I do today?”
There is no doubt that it is easy to be lured into a lifestyle of free spending, one which can leave little or no disposable income by the end of each month, and it would appear as though this is not the picture of those in the minority, but in fact the majority way of life.
Critical reaction: The dark subject matter of this script may be frightening for some. It tackles head-on our fears of financial insecurity and demonstrates that a failure to plan for the future can result in a bleak outlook. What was once a rose-tinted ideal becomes a head-scratching conundrum.
Some people may already have a company pension in place while others, especially expatriates, may have frozen pensions from when they relocated (more on that subject in future articles).
But there will also be those people who do not have access to company pensions and will be reliant solely upon their own ability to build a nest egg for the future.
Despite this, a message of hope remains. Planning for retirement is entirely possible; there are many options which may suit in terms of how much and for how long, including accumulating investment property as well as the traditional asset classes of equities and bonds.
The key is to implement a plan sooner rather than later and thus make a commitment to ensure future prosperity.
Jerry Dingley and business partner Tim Whiteley have a combined 50 years of experience advising expatriates in the Asia Pacific region. Specialist areas include offshore trusts & wealth protection vehicles, private client portfolios, QROPS UK pension transfers and creating tax efficient retirement solutions for individuals around the world. Contact them by email to info@qropspensioncentre.com
Note: This article contains general information only and is not intended to be taken as specific financial advisory, investment, or tax advice. A personal analysis should be obtained before acting or refraining from acting upon any information given.