Receiving an inheritance can be a life changing event but a recent study shows, for some in the UAE, it may not be enough to secure their financial aspirations.
Quilter International and Quilter Cheviot surveyed 130 UAE-based investors with $50,000 (£38,340, €46,188) and found 60% of respondents believe they will receive an inheritance.
This was up from 55% when they were asked the same question in 2018.
The average expected inheritance now stands at around AED1.05m (£219,375, $285,091, €263,240), which has decreased by AED30,381 since 2018.
Property
The most popular use for an inheritance is to buy a house (36%), followed by starting a business (32%) or using it for other investments (32%).
Nearly a quarter (23%) plan to invest their inheritance for the future or save it for retirement, while 12% will leave it in cash and 6% plan to spend it all.
But buying a house may be tricky, as the average house price in the city is over AED3m, according to the 2020 February Dubai House Price Index from data and insights firm Property Monitor.
Paul Evans, head of region, Middle East & Africa at Quilter International, said: “An inheritance can represent the most money someone will ever receive in their life.
“However, people often depend on it to deliver their financial aspirations, such as buying a property or starting a business.
“These are expensive objectives and money from an inheritance will need to be carefully managed if it is to help them achieve these ambitions.”
Don’t rely on inheritance
Mark Leale, senior executive officer at Quilter Cheviot (DIFC branch), said: “We would always encourage clients to plan for the future using their own capacity to save, rather than relying on the possible receipt of an inheritance, which is subject to many variables, typically outside of their control.
“This may be as simple as whether you are chosen as a beneficiary of a Will, the impact of taxes or the amount that is available to be gifted.
“An inheritance will come from the balance of someone’s wealth, which has not been spent during their lifetime. With people living longer, this amount could be much less than anticipated.
“Should you be fortunate to receive an inheritance, it is possible that this does allow you to rethink your future, as highlighted by our research.”
