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Pensions in the UAE

A pension can be the key to having enough money to live the kind of life you want beyond work.

There are many different types of pensions, but they’re typically a tax-efficient way to save money during your working life. They then provide you with an income when you retire.

Your pension contributions are usually deducted from your salary before tax, which makes them tax-efficient compared to other savings and investment accounts.

Your employer might add to your pension alongside your own contributions too.

In the UAE, pensions work differently depending if you are a UAE national or an expat living here.

Pensions for UAE nationals

If you’re a UAE national, both you and your employer have to make contributions to your pension scheme.

These pension contributions are mandatory to make sure people save responsibly for their retirement.

This covers both private and public sector employers:

Private sector employer:

  • you contribute 5%
  • your employer contributes 12.5%

Public sector employer:

  • you contribute 5%
  • your employer contributes 15%

Pensions for expats in the UAE

If you’re an expat working in the UAE, you won’t be eligible for mandatory pension contributions like you might be in your home country, or if you’re a UAE national.

But you will be entitled to end of services benefits when you stop working for a company if you’ve been employed by them for at least a year.

How much gratuity you receive from your end of services benefits depends on:

  • whether you’re employed in the public or private sector
  • your basic salary
  • how long you’ve worked for the company

You might also have pensions from previous employment in your home country, and if you’re intending to retire in the UAE, you’ll need to think about how you’re going to access them.

Check with a qualified tax professional if you’re unsure about the tax on your pension income as an expat.

3 alternatives to pensions

Aside from your pension pots, here are 3 other ways to save or invest for your retirement:

Savings accounts

Putting money into a savings account each month can be a good way to consistently build up funds and earn interest on what you save.

Having a designated savings account to support your retirement could help ring-fence that money, and encourage you not to spend it before you retire.

Investment accounts

An investment account is similar to a savings account, but you invest your money – in stocks and shares, for example – with the aim of higher growth.

You won’t earn a guaranteed rate of interest like you do in a savings account, but your investments could pay you dividends and grow in value over the long term.

But remember, the value of investments can go down as well as up, so it’s possible you’d get back less than you put in.


Similar to stocks and shares, the value of property can go up as well as down, so there’s always an element of risk involved.

But some people prefer their money to be invested in bricks and mortar, and property could give you a rental income in retirement while potentially also growing in value.

It takes a lot longer to sell property than stocks and shares, so your money will be less accessible.

If retirement is still a long way off, you could consider a mortgage to fund a property investment for your future. You’ll need to have the income level to justify it alongside any existing debt you may have, and a deposit saved to put towards it.

Explore: Our mortgages

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