[ad_1]
The United Arab Emirates (UAE) on Tuesday announced the launch of a bespoke savings solution called Second Salary, which has attracted the country’s Most of the foreign population Those who do not offer their nationals a government-backed savings plan.
The scheme was developed by National Bonds, an Islamic finance-compliant savings and investment company that is part of Dubai Investment Corporation, the main investment arm of the Dubai government.
Nationals and UAE estimates that 90% of the expatriate population will receive a second salary to generate supplemental income. According to a National Bond press release, this is the first step in creating a long-term retirement plan structure.
Mohammed Qasim Al Ali, Group Chief Executive Officer of National Bonds, said the investment plan was developed to meet the growing need to generate sustainable second income, which has become increasingly popular in the wake of the COVID-19 pandemic.
The Second Salary “provides UAE residents with an affordable and seamless push to achieve financial security,” Ali said.
The program consists of two main phases. The first is the savings stage, where customers can deposit a selected amount of funds in national bonds every month for a period of three to ten years. This period is followed by the income phase, which allows clients to withdraw monthly income consisting of their underlying investments plus accumulated interest or profits.
According to National Bonds, personal savings investment plans can generate double the return on investment. If clients invest the same $1,361.47 (AED5,000) per month over five years, but choose to redeem their investment over three years instead of the equivalent five years, they can get back more than double their initial investment each month, That is USD 2,777.40 (AED 10,200) per month.
personal savings In response to the needs of residents, pension plans have emerged in the UAE in recent years, such as the Smart Pension Plan of Commercial Bank of Dubai. National Bonds released a Golden Pension scheme last year that includes a similar savings scheme, but Second Salary is designed to be more flexible, allowing customers to withdraw funds easier and faster without penalties, Ali told Gulf News in an interview.
According to the World Bank’s 2016 Old Age Savings Report, the Middle East and North Africa (MENA) region is considered to have the lowest saving rate of any global economy, with only 7% of adults in the region saving for retirement at the time.
recent, Fintech application Changing this narrative and investing for the future is being encouraged and made easier for MENA youth, even if they do not have access to financial savings resources.
Most oil-rich Gulf Arab states, including the United Arab Emirates and top crude exporter Saudi Arabia, provide their citizens with government-funded pensions.
However, Saudi officials warned last year that the system was unsustainable as the kingdom continued to divert its economy away from oil by investing and developing non-oil sectors, according to Bloomberg.
[ad_2]
Source link