Seven in 10 workers in the UAE depend on their end-of-service gratuity payment to fund their retirement, an increase from <a href="https://www.thenational.ae/business/money/six-in-10-uae-residents-rely-on-their-gratuity-to-fund-their-retirement-1.815925">six in 10 last year</a>, a survey found. The study from financial services companies Old Mutual International and Quilter Cheviot, both part of the Quilter Group, found 69 per cent of respondents are either fully or partly relying on their gratuity for retirement, compared to 59 per cent in 2018. The surveys polled 130 residents who had a minimum of $50,000 (Dh183,640) invested in the stock market through a professional fund manager. Despite this increased reliance on the gratuity payment, workers said they expect to receive just Dh17,000 on average when they leave their company, compared to Dh21,600 a year ago. "It's still surprising that a large number of people are highly reliant on the gratuity sum of capital contributing towards their retirement when in actual fact it's a relatively small amount of money," Mark Leale, head of Quilter Cheviot's Dubai office, told <em>The National</em>. The UAE government is considering an overhaul of the current system to accommodate longer stays and more closely align local laws with global retirement savings plans. <a href="https://www.thenational.ae/business/money/how-difc-s-new-savings-scheme-is-evolving-as-it-nears-january-roll-out-1.930708">The Dubai International Financial Centre is planning to replace its gratuity with a savings scheme on January 1</a> that is meant to generate investment returns through monthly defined contributions from the employer and voluntary contributions from the employee. “The global retirement landscape is dramatically shifting from one where someone’s retirement provision is the responsibility of businesses and the government to that of the individual,” said Paul Evans, head of the Middle East and Africa region for Old Mutual International. Currently, employees leaving a company in the UAE after at least one year are entitled to a gratuity equal to 21 days of basic pay for each year of service. After five years, they are entitled to 30 days of pay per year of service. “Originally the gratuity payment was not intended to fund people’s retirement. It was either to help them repatriate or to see them through between jobs,” Mr Leale said. Nearly half of the survey respondents said they would use their gratuity to invest in a business, 40 per cent said they would use it to invest in the stock market and 31 per cent said they would spend part of it and save the rest. Three quarters of respondents expect to continue to work in retirement in some capacity, with 40 per cent doing so for social reasons and 35 per cent for financial reasons. Seventy-five per cent of those who expect to continue working believe that they will be doing so on a self-employed basis. “With expatriates typically staying in the UAE for much longer during their working careers, proper funding of a pension-type arrangement is essential to assist employees with securing their financial future,” Mr Leale said. A recent survey from Swiss insurer Zurich found that <a href="https://www.thenational.ae/business/money/75-of-uae-companies-don-t-set-aside-assets-for-end-of-service-gratuities-1.936977">three quarters of companies in the UAE do not set aside specific assets for end-of-service benefits</a>. About 80 per cent of the 161 companies polled said a mandatory funding requirement would be a good decision.