National Bonds Corporation has revealed the results of its annual National Bonds Savings Index for the GCC. The results that covered the three main factors for saving of financial stability, potential for saving, and the savings environment that indicated an improvement in the residents’ tendency towards saving in the UAE, Qatar, Oman, Bahrain and Kuwait. Saudi Arabia, on the other hand, revealed a marginal decrease in the total number of savers.
The study covered the three main factors that encourage regular saving and compared the results with the outcomes of the 2012 Index.
In Qatar, 47% of the respondents claimed their savings were not at all adequate for the future, while 12% believed their savings would see them through in the future and a nominal 1% thought their savings were more than adequate for the future.
As a key highlight, the study showed that 89% of the respondents in the GCC states expected financial stability for the next six months. A majority of respondents agreed that a significant portion of their expenses were spent on food and rent. The study additionally indicated that 20% of the GCC respondents currently saved 11%-20% of their overall monthly income, while 4% of them saved 51%-60% of their overall monthly income.
Commenting on the results of the GCC Savings Index, Mohammad Qasim Al-Ali, CEO, National Bonds said, “Over the past decade, the GCC economy has witnessed significant financial developments that were influenced in one way or the other by the prevailing global economic landscape. Such macro impact has triggered an urgent need to familiarise institutions and individuals with the shifts in the local economy to ensure a secure financial future. Indeed, we are very proud to be releasing the GCC Savings Index for the third consecutive year. The Index has become a benchmark indicator for the GCC’s economy. Additionally, it is considered an important Index for finding optimal solutions to the challenges faced by all sectors of the community when it comes to adopting a regular savings habit.”
The National Bonds Savings Index includes the results of a comprehensive annual study of the behaviour and attitudes of more than 1,707 GCC residents and low income workers towards saving and spending money. National Bonds Corporation had launched the initiative with the aim of identifying the challenges encountered by all categories and sections of communities and to provide practical solutions for the development of saving patterns and habits among the people in the GCC countries.
Key results of 2013 National Bonds Savings Index for the GCC region:
- 46% of the respondents from the other GCC countries did not expect any change to their monthly income in the next six or 12 months, while 5% expected a decrease in the monthly income during the same period.
- 89% of the respondents from the other GCC countries expected to have financial stability during the next six months, while 21% did not anticipate a stable financial status during the same period.
- Despite the varied priorities of the GCC residents, the results showed consensus in terms of spending on groceries and restaurants. Rentals topped the list in both Kuwait and the UAE.
- Current bank accounts or saving accounts were the most preferred saving options in the GCC countries.
- Many respondents expressed their interest in real estate investment as a means of saving, particularly in Qatar, Oman and the UAE.
- Results for the GCC region’s non-savers indicated that the key factors affecting their choice of an ideal saving vehicle were the company’s compliance with Sharia, followed by the good reputation of the provider, and lastly by the high annual returns.
- 20% of the GCC respondents saved 11%-20% of their overall income, while 4% of respondents saved 51%-60% of their overall income.
- The current year’s results showed a mix of opinions among respondents in the GCC countries in terms of their priorities in establishing a regular savings plan. A consensus indicated that children’s education, which ranked first in the UAE, Qatar, Oman and Kuwait and retirement, which ranked first in Bahrain, were two of the most prominent reasons for saving in the six GCC countries. As for the residents of Saudi Arabia, real estate purchasing was mentioned as the primary reason for saving for the third consecutive year.
- Non-saver respondents in the GCC countries, with the exception of Saudi Arabia, agreed that children’s education was the number one reason for saving.
- A quarter of the respondents in the UAE, Bahrain, Kuwait and Qatar showed an increase in credit card spending, while one third of the respondents in Oman and Qatar indicated their credit card spending remained unchanged. The final results showed that more than a quarter of the respondents from all over the GCC States did not have credit cards, especially in Saudi Arabia, Bahrain and Oman.
Qatar
- In Qatar, 47% of the respondents claimed their savings were not at all adequate for the future, while 12% believed their savings would see them through in the future and a nominal 1% thought their savings were more than adequate for the future.
- 25% of Qatari savers admitted to saving significantly less than in 2012. In contrast, 4% admitted to saving significantly more.
- 10% of the respondents in Qatar stated they were saving more than they had planned for, marking a notable increase from last year.
- The top three factors affecting savers’ selection of savings instruments in Qatar included attractive returns, Sharia compliance and the sound reputation of the provider, in that order.