Spencer Lodge on Expat Pension Provision for Women in Abu Dhabi and Dubai

Spencer Lodge is Managing Director of Fund Advisers and is widely recognized one of the leading financial advisers for the female expatriate community here in the United Arab Emirates. We asked him about pension planning provision for women already here in Abu Dhabi and Dubai.

Here’s what Spencer Lodge had to say.

Spencer Lodge

State Pensions – An overview

If you continue to pay your contributions towards your state pension and decide to move abroad to somewhere like Abu Dhabi or Dubai, then it could prove problematic when investing for your retirement. You can continue to pay class 2/3 contributions to the UK state pension scheme, but your final entitlement will almost certainly not keep you in a luxury lifestyle in your retirement years.

Another issue is that the age of retirement for state pensions will be rising in the coming years, meaning that you will have to work beyond the current 65 year old threshold. On the other hand, if you do not continue to pay contributions into your UK state pension (since you don’t have to if you move abroad), then this could potentially reduce your entitlement completely. This would mean that you would have to start saving towards your pension through other means if you have not been investing already. In order to overcome these problems with state pensions, you will need to start saving or investing towards your retirement as early as possible.

Women Will Benefit From Saving

Whether you live in the UK, Abu Dhabi or Dubai, It is a hard reality to consider, but statistically, one marriage in two will end in divorce, and women who have not planned for their retirement could end up with nothing to live on. So do you rely on your husband to support you through your retirement years, or will you start saving and investing in your own pension fund for yourself?

Only about 20% of all women will receive an adequate pension when they retire. The large majority of women are approaching retirement without any financial security measures in place leaving them open to potential hardship should their marriage break down. Even in this day and age, a woman’s earnings will typically be much less than any man’s meaning that they will automatically have lower pension benefits. That is, if a woman has a pension in the first place. Around 50% of working women do not have a company pension plan and are less likely than a man to receive an adequate pension.

So, what can you do to ensure that you are financially secure when you retire?

Start planning your pension while you are young and begin investing as much as you can each month into your future pension fund. Although your spouse will more than likely have a larger pension fund to retire on than you, at least you have prepared for the worst with your own retirement plan. Above all, your retirement could be more luxurious than planned.

If you are based in Abu Dhabi or Dubai and would like further information on the range of products and services offered by Fund Advisers, please visit  www.fund-advisers.com