Latest news with #SecondSalary
Khaleej Times
20-03-2025
- Business
- Khaleej Times
'Frustrating': Some young UAE residents say 'trapped' in cycle of poor financial planning
A recent survey by National Bonds showed that 40 per cent of Gen Z were optimistic about achieving their financial goals, yet, many still call for more open conversations on financial literacy. Retirement planning is one of the top financial priorities for Generation Z — for the second year in a row. According to the survey, 40 per cent of respondents reported being on track to meet their 2024 financial goals, while 45 per cent stated they had partially achieved their targets. Younger generations are showing increasing financial awareness, with 40 per cent of Gen Z and 36 per cent of Millennials expressing confidence in their financial aspirations, compared to 32 per cent of Generation X. Rehab Lootah, Group Deputy CEO of National Bonds, emphasised, 'The results of this year's survey reflect a growing commitment among individuals to achieving financial stability, particularly in retirement planning.' She highlighted that to support this commitment, National Bonds offers innovative financial solutions, such as the ' Second Salary ' savings plan designed to help UAE nationals and expatriates build supplementary retirement income. However, other Gen Z residents feel a pressing need for financial literacy. Ahmed M., 26, who lives in Dubai, believed that starting his career would come with a clear path to financial stability. "I thought I'd have it all figured out by now," he admitted. As he grew older, he realised that several responsibilities came with adulthood. The higher cost of living made budgeting difficult, and despite his efforts, he often found himself overwhelmed. "With inflation skyrocketing and many services becoming monetised, it's hard for our generation to keep up," he pointed out. "I wish I had more financial literacy before joining the workforce. Understanding budgeting, saving, and investing would have made a significant difference." He often finds himself living pay cheque to pay cheque, which adds to his stress. "It's tiring knowing that I'm constantly just making ends meet." Fatima, 29, resides in Sharjah and shared a similar sentiment. She also envisioned a straightforward financial future when she began working. "After a year of living alone and trying to manage rent with other bills, I realised it would be better to move back to my parents' house," she explained. Like Ahmed, Fatima emphasised the need for open conversations about financial struggles. "Many people don't talk about their financial issues. It's crucial to create a space where we can share our experiences without judgement." Fatima lamented the lack of financial education in schools. "If I had learned about budgeting, saving, and the importance of financial planning earlier, I might not feel so trapped in this cycle of living pay cheque to pay cheque." She described how the constant pressure to make ends meet has led her to feel exhausted and anxious. "Every month, I budget tightly, but unexpected expenses always seem to pop up. It's frustrating." Both Ahmed and Fatima advocate for greater financial literacy initiatives. "We need workshops and resources that help young people understand how to manage their finances effectively," Ahmed suggested. "It would empower us to make informed decisions rather than just surviving from one pay cheque to the next." As financial anxiety becomes more prevalent, experts warn that it can significantly impact an individual's life and productivity. Dr Sara Al-Mansoori, a psychologist, explained, 'Financial anxiety often manifests as chronic worry, which can lead to physical symptoms like headaches and insomnia. This not only affects personal well-being but also hampers professional performance." Dr Al Mansoori continued, 'When individuals are preoccupied with financial concerns, their ability to concentrate diminishes. This can deter them from pursuing career advancement opportunities, resulting in stagnation. To break this cycle, it's essential to promote financial literacy and create supportive environments where individuals can share their experiences and seek guidance.'
Hi Dubai
18-03-2025
- Business
- Hi Dubai
UAE Residents Opt for Longer-Term Savings as Interest Rates Set to Decline
With interest rates expected to drop in line with the US Federal Reserve's anticipated cuts, UAE residents are increasingly opting for long-term savings to secure higher returns. Financial institutions have reported a surge in deposits as savers seek to lock in current high yields before they decline. 'People are choosing longer saving tenures, between three and 10 years, through products like our Millionaire product, Second Salary, and Booster schemes. They know rates will eventually drop, so they prefer securing returns of 3.5% to 4% for the next four to five years rather than renewing deposits annually at lower rates,' said Mohammed Qasim Al Ali, Group CEO of National Bonds. Shariah-compliant financial institutions offer profit rates instead of interest, attracting depositors looking for stable, risk-free returns. National Bonds' Second Salary savings programme allows residents to save from Dh1,000 per month with flexible tenures. Savings culture is growing across income levels, with National Bonds reporting a 51% increase in regular savers and 45,800 new customers in 2024. The company's investment portfolio surged to Dh15.8 billion, marking 22% growth. Customers earned up to 4.75% returns, benefiting from high interest rates. The company is also integrating AI-driven financial planning tools, including a robo-advisor to guide customers on savings strategies and debt management. Digital savings increased by 41% in 2024 due to these innovations. Additionally, National Bonds plans to expand its real estate portfolio with a new office tower in Barsha Heights by 2025. With economic conditions shifting, UAE residents are strategically positioning their finances, prioritizing structured savings to maximize returns before the anticipated interest rate cuts take effect. News Source: Khaleej Times
Khaleej Times
18-03-2025
- Business
- Khaleej Times
UAE: Why residents are opting for longer saving deposits with banks, schemes
Residents in the UAE are increasingly opting for longer saving deposits with banks and saving schemes. Reason: They want to cash in on high returns amid high interest and profit rates before they begin to decline. 'People are now opting for longer periods of saving products, which we offer through our millionaire product, the Second Salary, and also the Booster products, where we offer between three and 10 years of investments. "Everybody knows that the rates will start going down as it is only a matter of time. So they want to lock yields from now. They're now getting three and a half to four per cent return for another 4-5 years. Therefore, they're better off than renewing it in the financial institution year by year, because they'll get less returns,' said Mohammed Qasim Al Ali, Group CEO of National Bonds. Significantly, interest rates in the UAE are expected to drop this year in line with the US Federal Reserve. Analysts expect the Fed to cut rates twice this year. Instead of interest rates, Shariah-compliant banks and financial institution, therefore, offer profit rates to depositors. Under National Bonds' Second Salary saving programme, residents can start saving with Dh1,000 a month. They can choose a tenure of 3 to 10 years and earn strong returns. ' More people have now started looking at the savings journey not as an obstacle but as an enabler to reach their financial goals. So there is a huge psychological shift that we have seen. Secondly, because of the high interest rates, people now prefer to place their savings in deposits across the banking system and National Bonds because of the high returns that they get almost risk-free,' Al Ali told Khaleej Times in an interview. He elaborated that savings are gaining momentum across low, middle and high-income classes. Up to 4.75% return The Sharia-compliant savings and investment company on Monday announced that bondholders earned up to 4.75 per cent in returns on their savings in 2024, as customers benefited from high interest rates. National Bonds witnessed a 51 per cent increase in regular savers in 2024. It added 45,800 new customers last year, underscoring heightened interest in structured savings. Its investment portfolio surged to Dh15.8 billion in 2024, achieving 22 per cent growth over the past year. The company is also exploring to expand AI-enabled solutions that will interact with the customers. 'For example, we are exploring now robo advisor, whereby customers can enjoy talking to an AI-enabled solution whereby they give them advice on how and where to save, how to diversify their portfolio, how to reduce their debt.' The integration of AI-driven automated financial planning tools led to a 41 per cent increase in digital savings last year compared to 2023, it is a.d Al Ali added that the company will launch an office tower in Barsha Heights in 2025 to expand its real estate portfolio.
