75% of UAE Employees Expect Bonuses in 2025

Employees are prioritising future investments, emergency funds, and retirement planning over short-term spending

Dubai, UAE, 27^th February 2025: Three-quarters of UAE employees expect a bonus in 2025, yet rising living costs and long-term financial concerns are reshaping how they plan to use it. A recent YouGov survey commissioned by Zurich International Life Middle East highlights a shift toward structured financial planning, with saving now taking precedence over discretionary spending.

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More employees are choosing to save

Annual bonuses have traditionally played a significant role in financial planning. Recent trends indicate that many UAE employees are prioritising savings rather than spending on non-essential purchases.      According to the survey, a significant majority (68%) of employees plan to save some or most of their bonus. Younger generations are emerging as disciplined savers—31% of Gen Zs (18-24) intend to save their entire bonus, the highest of any age group. Meanwhile, 52% of those aged 45+ will save most of their bonus while allowing for some discretionary spending.

"The study shows a significant shift in how UAE employees’ approach financial planning, with more individuals prioritising future investments, children's education, and retirement savings," said Ashika Tailor, Head of Business Development - Employee Benefits, Middle East at Zurich International Life. "However, there is still untapped potential in workplace savings schemes, life insurance, and structured investments, which can play a crucial role in long-term financial security."

Rising costs are changing spending habits

Rising living costs have altered how people manage their earnings, with 55% of employees reporting           a significant impact on their financial decisions. While 60% plan to spend part of their bonus on travel and leisure, a notable 27% are prioritising skill-building, including AI-related training. This shift highlights a more balanced approach as employees manage short-term lifestyle choices and long-term financial security.

Financial advice boosts confidence

Despite a growing emphasis on savings, financial literacy remains a key challenge. While 55% have sought financial advice—up from 39% in 2024—many still regret not starting their savings journey earlier, proving that even small steps taken early can make a significant difference. The importance of structured guidance is evident, as confidence in retirement readiness jumps to 86% among those who have consulted financial professionals, compared to 60% among those who have not.

According to the study, confidence in financial security varies by age, with younger individuals feeling the most assured. Among Gen Z, 100% report being at least somewhat confident. However, confidence tends to decline with age—dropping to 80% (ages 25-34), 74% (ages 35-44), and 67% (ages 45 and older). This reinforces the importance of financial planning at an early stage to ensure long-term security.

Aligning gratuity expectations with retirement realities in the UAE

Confidence in the UAE’s economic future remains high, with 67% of employees optimistic about long-term stability. Among Emiratis, this sentiment is even stronger, reaching 80%. However, retirement remains a pressing concern, with 77% estimating they will need up to AED 10 million to retire comfortably. Despite this, 65% believe their workplace savings schemes or gratuity will be sufficient, which may signal over-reliance on employer benefits, further highlighting an opportunity to increase awareness about structured retirement planning.

"Many employees may not fully realise the gap between their gratuity expectations and their actual long-term financial needs. ," Tailor added. "Employers play a crucial role in equipping their workforce with the right tools, education, and structured savings plans to help them build lasting financial security. While gratuity serves as a valuable financial cushion during career transitions, it should be complemented with additional savings strategies to ensure true retirement readiness. Companies must look beyond traditional benefits and consider solutions that create lasting financial security. "

Investment priorities are evolving

Employers have a significant opportunity to improve employee benefits by implementing robust workplace savings plans. Currently, only 17% of respondents have access to such plans, and only 18% benefit from government-backed retirement schemes. Implementing structured savings options or pension contributions can help bridge this gap.

Workplace savings schemes play a crucial role in talent retention by fostering a culture of financial security and trust. When employers offer savings plans, they demonstrate a commitment to their employees' long-term well-being and financial health.

Additionally, transparent communication about end-of-service benefits and financial education allows employees to make informed decisions for long-term stability. With the right planning and financial awareness, employees can take proactive steps toward a more secure future—one that employers can actively support through smarter savings initiatives.