JEDDAH: Some 45 per cent of people living in Saudi Arabia do not save any money at all out of their monthly income, according to a new survey of attitudes towards saving and investment among residents in the Kingdom.
The survey, conducted by the Jeddah based wealth management firm SEDCO Holdings and Dubai-based online finance group Souqamal.com, found that most respondents blamed a low level of income for their failure to put money aside.
It also found that only a further 17 percent saved less than 5 percent, while 38 percent saved more than 6 percent.
The results come as the Ministry of Housing is asking Saudis to save for a deposit on their future home. It finds a lack of a savings culture that makes this goal difficult.
Amr Banaja, a SEDCO executive, said: “Anyone should be able to achieve what they aspire for financial without resorting to borrowing or depriving themselves of what they desire. One can do this by properly managing their finances, shunning needless expense, and choosing appropriate saving and investment opportunities.”
When asked about the reason behind their failure to respond, 60 percent said their level of income prevented it. Since 2014, official statistics show that the average levels of income have risen by 13 percent in the private sector, and 6 percent in government employment, the survey compilers said.
The survey raises the question of whether the cost of living in the Kingdom has risen faster than salaries. According to official figures inflation rose by 7.6 percent between 2014 and 2016. It fell to near zero last year, but jumped again at the beginning of this year, with the introduction of value added tax.
The last official figures showed consumer prices rose 2.7 percent in February, marginally down from the 3 percent of January.
The survey also found that 83 percent of respondents have no long term investment plans, showing a lack of awareness of investment techniques and practices.
Ambareen Musa, founder and CEO of Souqamal, said: “Saving and investment should go hand in hand. Start with a monthly budget and figure out what your basic necessities are that you can save every month.”
SEDCO has launched the Riyali financial literacy program to make people aware of the basics of investment.
The survey was conducted among 2,000 respondents, which included Saudi citizens and expatriates, in line with the Kingdom’s demographics.