Consumers in the UAE plan to adjust their lifestyle by reducing their household and miscellaneous expenses over the next three months, according to research by global life assurance company Friends Provident International (FPI).
The survey conducted on 880 respondents in the UAE by consultancy firm Insight Discovery found 26% rank clothes as the top area to cut back their spending on, while 15% consider petrol expenses as the first item to trim their expenses.
A further 9% of residents believe weekend activities, dining out and luxury products as the top three areas each to make cutbacks in the next three months.
The survey also shows that inflation is biting into budgets across all households, whether it is single individuals, married couples with no children, or families. One-in-three single individuals (29%), and one-in-four married couples without children as well as households with families plan to cut down on clothes expenditure the most, followed by petrol.
Some 99% of consumers are in favour of keeping their expenses on mobile/ broadband/ TV and subscriptions, beauty/ grooming products, gym membership, home furniture, and home electronics broadly unchanged, with only 1% of them ranking each of them as the top areas for cutbacks.
However, despite a severe squeeze on their finances due to higher prices, 97% of UAE investors still remain committed to saving for their future, with only 3% of them rank contributions to their savings plans as the top priority area to reduce spending.
David Kneeshaw, group chief executive of FPI owner IFGL, said: “This survey demonstrates that the cost-of-living crisis is beginning to impact the finances of people living in the UAE.
“However, the silver lining is that while consumers are controlling their spending and re-adjusting priorities, the majority of them still remain committed to saving for their future. The survey also offers an opportunity for businesses across the UAE to get a sense of the challenges that residents face in a period characterised by high inflation.”
Stuart Shilcock, head of sales at FPI, added: “Every observation of the survey is offering fascinating insights into what matters to UAE residents right now. Faced with inflationary pressures, consumers are themselves having to tighten the purse strings.
“Having said that, the competition for share of wallet in the rest of 2022 is also getting intense in the UAE. It’s, therefore, crucial for financial advisers to ensure the productivity, value and efficiency of their products and services to align with changing consumer preferences. That’s the challenging aspect of the circumstances we are in.”