Poor health prevents UAE residents from living their dream retirement

• HSBC survey finds that only four in ten retirees in the UAE rate their health as good for their age
• Six in ten pre-retirees are unable to predict how much they are likely to spend on healthcare in retirement
• Nearly half (46%) of working age people believe that poor health will make saving for their retirement more difficult

Dubai, UAE - 27 January 2016: The majority of residents in the UAE are facing the risk of going into retirement with health issues that could prevent them from fulfilling the aspirations they have for later life. HSBC’s The Future of Retirement 2016 report reveals that nearly eight out of ten pre-retirees in the UAE (78%) say that lack of free time (37%) and work commitments (34%) are preventing them from leading a healthier lifestyle. As a result of which, almost half (46%) of the working age population believe that poor health will make saving for their retirement more difficult. With over half of UAE pre-retirees (61%) unable to predict how much they are likely to spend on healthcare in retirement, the study reveals that unless working age people take practical steps to improve their wellbeing, they risk being financially unprepared for a comfortable retirement, especially with other life events coming in the way.

The Future of Retirement: Healthy new beginnings, a survey of more than 18,200 people across 17 countries and territories including more than 1,000 in the UAE, assesses retirement trends globally and identifies the key issues associated with ageing populations and increasing life expectancy around the world.  This year’s research reveals that people in the UAE may not be able to experience “a retirement bounce”; an improvement in their health during early retirement. In fact, even with more time to spend on healthy living, UAE is the only country among the 17 countries surveyed, where the difference between respondents rating their health as good for their age is lowest for retirees than pre-retirees.

The desire to retire

It is no surprise that 29% of pre-retirees aged above 45 years would like to retire in the next five years in order to spend more time with their family (54%), enjoy the freedom to travel or pursue other interests (42%), or join their partner in retirement (18%), among other reasons. Despite this desire, 22% believe that they will not be able to retire in the next five years due to financial commitments and other life events. A sizeable proportion sees the negative effects of work as a main impediment to their desire to retire early. In fact, 29% say that they are tired of the everyday routine of work while almost a fifth of respondents (20%) say that work has a negative impact on their mental and/or physical health.

Commenting on the findings, Gifford Nakajima, Head of Wealth Development, UAE and MENA, Retail Banking and Wealth Management, HSBC Bank Middle East Limited, said: “While previous reports showed that pre-retirees find life events, such as buying a home, one of the biggest barriers to retiring, the new findings show that there is more to that. A bigger concern that working age people do not seem to identify with, but is increasingly prevalent among retirees, is that healthcare costs and issues will have a significant impact on their hopes to live a comfortable retirement. To put it simply, by starting to save for retirement as early as possible, working age people can improve their chances of retiring when they want to.'

Early planning for a healthier and wealthier retirement

According to the Global Burden of Disease study from 2013, more than 66% of men and 60% of women in the UAE are obese or overweight . Alarmingly, the chronic lifestyle-related diseases such as diabetes, coronary and cardiovascular conditions and hypertension are induced by sedentary lifestyle, and as such, are ones that can be mitigated through a more health-conscious lifestyle.

Not surprisingly, pre-retirees and retirees are concerned that poor health will affect them in retirement especially in terms of their ability to take care of others (33%), their mobility (33%) and their ability to work (33%). On the financial side, the majority of working age people are unable to predict how much they will spend on healthcare in retirement, which can turn out to be a considerable amount. HSBC’s research shows that the number of people spending on healthcare nearly doubles as they grow older; for instance, 16% of 25-34 year olds say they spend money on prescriptions and medicines, and 15% on doctors and dieticians, as opposed to 34% and 36% respectively of those aged above 55 years that say they do so.

“With enough reason, a period of improved health can be an unexpected advantage of retirement for many people. However, working age people should not wait until they have left their jobs to take active steps to improve their health; instead, they should make use of the country’s excellent infrastructure of medical and healthy living services to pursue a healthier lifestyle.”

“The resurgence experienced in early retirement can often be followed by a period of frail retirement, when health problems begin to emerge as a result of the natural aging process. As such, it is important to have a financial plan in place to help provide for every eventuality in later life - whether this is funding a more active lifestyle during early retirement, or paying the increased healthcare in later retirement,” Nakajima added.