How expats in the UAE can plan for retirement without a company pension

Ask a UAE expat what their pension looks like and you usually get a pause, then a number. The number is their end-of-service gratuity. It is smaller than they expect, and it arrives once.

Retirement planning for UAE expats starts somewhere different from London, Toronto or Sydney. In those markets a workplace pension does the saving quietly, whether you pay attention or not. Here you set it up, fund it and manage it. You keep more of what you earn along the way, and nothing happens by itself.

No pension as a UAE expat? What you have instead

Your entitlement depends on which jurisdiction your employer sits in, so there are four answers.

Mainland UAE and most free zones: end-of-service gratuity

Under Article 51 of Federal Decree-Law No. 33 of 2021, an employee who completes at least one year of continuous service is entitled to 21 days' basic wage for each of the first five years and 30 days for each year after that, with the total capped at two years' wage. The word doing the heavy lifting there is basic. Housing, transport and other allowances are excluded, and UAE packages commonly set basic salary at somewhere between half and two thirds of the total. The gratuity base is smaller than the salary you live on.

DIFC: the DEWS scheme

Since 1 February 2020, under DIFC Employment Law Amendment Law No. 4 of 2020, DIFC employers have paid monthly contributions into the DIFC Employee Workplace Savings Plan in place of an unfunded gratuity liability. The rate is 5.83% of monthly basic salary for the first five years of service and 8.33% after that. Service before February 2020 keeps its accrued gratuity under the old regime. The money sits in a trust with Equiom as master trustee, Zurich Workplace Solutions as administrator and Mercer as investment adviser. You pick from a fund range that includes Shariah-compliant options, or your money lands in the default Low/Moderate Growth Fund. Where your employer has enabled it, you can add voluntary contributions by salary deduction.

ADGM: gratuity, with an opt-in alternative

Abu Dhabi Global Market has no DEWS equivalent. Its Employment Regulations keep the same 21-day and 30-day formula, with two wrinkles: the updated regulations require basic salary to be no less than 50% of total salary, and an employer may offer employees the written option of joining a pension or savings scheme in place of accruing gratuity.

The rest of the private sector: the voluntary savings scheme

Cabinet Resolution No. 96 of 2023 created an alternative end-of-service benefits scheme run by MoHRE with the Securities and Commodities Authority. Employers opt in, then pay the same 5.83% and 8.33% rates into SCA-approved investment funds. Lunate and Daman Investments were the first funds authorised, in July 2024, and MoHRE publishes the current list in conventional and Shariah-compliant structures. Employees can top up voluntarily, withdraw their own voluntary money, and keep the balance invested after leaving the job. Gratuity accrued before enrolment stays frozen under the Article 51 formula and is paid separately.

Employers are not obliged to join, and take-up has been slower than the reform's designers hoped. MoHRE ran a public consultation that closed on 28 February 2026, and labour advisers widely expect some form of mandatory rollout to follow. Nothing has been announced yet, so it is not something to plan around.

Emirati and GCC nationals sit outside all of this. They contribute to state pension and social security through GPSSA and its GCC counterparts, drawing a pension from age 60 after 15 years of insured service. Contributions under Federal Decree-Law No. 57 of 2023 run at 26% of the contribution account salary in the private sector, 11% of it from the employee. Roughly three times the DEWS rate, buying a defined benefit instead of a pot. That is a useful benchmark for what funding a real pension costs.

Which makes "no pension UAE expat" a narrower problem than the phrase suggests. Funded schemes exist, and in the DIFC one of them is compulsory and invested from the first month. None of them are sized to replace an income for twenty or thirty years, as adequacy will depend on individual circumstances and retirement needs.

DEWS vs end of service gratuity in the UAE: run the numbers

Take an employee with ten years of service and a basic salary of AED 20,000 a month.

Under the mainland formula: 105 days for the first five years plus 150 days for the next five, so 255 days at a daily rate of AED 666.67. Total gratuity, roughly AED 170,000.

Under DEWS, on the same salary and service, the employer pays in AED 169,920 over the decade. That is the gratuity figure almost to the dirham, and the rates were designed that way. At an assumed 6% annual return the balance compounds to roughly AED 226,000, because the money was invested throughout instead of sitting on an employer's balance sheet as a promise. (A flat salary and a steady 6% are both simplifications. Real returns vary by fund and by year.)

Illustrative only. The 6% figure is a hypothetical assumption applied at a constant rate, not a forecast, and does not reflect the rate of any CUSP product or DEWS fund. Past performance is not a reliable indicator of future results.

Compounding buys about a third more, which is the whole argument for funded schemes. It does not change the conclusion. At AED 15,000 a month of living costs, AED 170,000 covers eleven months and AED 226,000 covers fifteen. Either way you are looking at a bridge between jobs.

Expectations run well ahead of that. BlackRock's Read on Retirement: GCC 2026, published in June 2026 and based on a survey of 1,000 working individuals across the UAE and Saudi Arabia, found 41% of expatriates felt prepared for retirement against 59% of nationals, with holdings concentrated in cash (49%), gold (40%) and property (18%).

A YouGov study commissioned by Zurich International Life for its UAE Money Report 2025, published in February 2025, found 65% of UAE residents relying primarily on workplace savings or gratuity, while 61% believed AED 5 million or less would be sufficient.

Your UAE years as an SWF equivalent

There is a framing for this that fits the country you live in. The UAE built its long-term finances by converting a finite income stream into a permanent one through sovereign wealth funds. Your UAE years are a finite income stream. One way to think about long-term retirement planning is to build savings and investments during your working years that can continue beyond your period of UAE residency.

How big a retirement pot do you need in the UAE?

The 4% guideline gives you a rough target. Multiply your expected annual retirement spending by 25. Withdraw 4% of the portfolio in year one, adjust for inflation each year after, and historical data suggests the money lasts around three decades. It comes from a 1994 paper by William Bengen in the Journal of Financial Planning, tested against US market data back to 1926.

The figures below are an illustrative starting frame, not a promise, a projection, or a target any particular portfolio will reach.

Treat the table as a starting frame, not a promise. The rate itself is disputed: Bengen's later work puts the historical worst case nearer 4.7%, while Morningstar has argued for something closer to 3.3% to 3.8% on forward-looking assumptions. It assumes a diversified portfolio, not a savings account. Retiring early stretches the horizon and argues for a lower rate. Private healthcare costs rise faster than general inflation, and faster still with age.

Then there is the question of which country's prices you are budgeting for, since for a lot of UAE expats it is not this one. Financial planners working with Dubai clients build cash-flow forecasts around detailed expense summaries instead of a single multiple. Whether you own or rent in retirement moves the answer more than almost anything else on the list.

Building a self-directed retirement plan in the UAE

Why the contribution rate matters more than the strategy

A UK employee on auto-enrolment has 8% of qualifying earnings going into a pension without ever making a decision, at least 3% of it from the employer. Nothing does that for you here. The rate has to come from a standing instruction, because intention alone has a poor record. You could move the money on payday into a separate account or platform, before it becomes available for anything else.

Rules of thumb in the financial planning literature tend to land around 15% to 20% of gross income for someone in their thirties, with a higher figure for anyone starting in their forties with a decade of UAE earnings ahead. These are general benchmarks, not a recommendation: the right rate for any individual depends on their circumstances, obligations and objectives.

Private pension alternatives, and one to approach with caution

The realistic options are an international investment platform or brokerage account, voluntary DEWS contributions if you work in the DIFC, a home-country pension where you are still eligible to contribute, and property.

There is a fifth option that gets sold to expats far harder than any of those four, and it deserves a warning. Long-term contractual savings plans, typically running 20 or 25 years, have often carried front-loaded commission and surrender penalties that fall heavily on anyone who stops early. They are sold as a private pension alternative, and they have caused problems for people who changed jobs, countries or simply want to stop. Anything with a contractual term is worth understanding in full before signing, and three questions in particular tend to be answered in writing:

Currency: matching the portfolio to where the money gets spent

The dirham has been pegged to the US dollar at 3.6725 since 1997, with the Central Bank intervening automatically to hold the parity. A UAE salary is a dollar salary. If you plan to retire into euro, sterling or rupee spending, a portfolio held entirely in dollar assets carries a mismatch you will feel in your first year of drawdown.

Global equity funds hedge some of this by themselves, since the underlying companies earn in many currencies, where the mismatch bites hardest, and it is the part most commonly shifted toward the retirement currency as the spending date approaches.

Target date investing and a long-term portfolio you can hold on to

The core of a self-directed retirement plan is unglamorous: a diversified global equity allocation, held through low-cost funds, with fixed income added as the horizon shortens.

Target date investing is the formal version. The fund holds an aggressive allocation when retirement is decades away and moves gradually toward bonds and cash as the date approaches, following a predetermined glidepath. A published glidepath might sit near 90% equities twenty-five years out, 60% at ten years and 40% at the retirement date, though allocations vary widely between providers. Some investors buy a fund that runs the glidepath for them; others manage the shift themselves with an annual rebalance, which has the side benefit of forcing you to sell what has run up and buy what has lagged.

Annual rebalancing, or rebalancing whenever an asset class drifts more than about five percentage points from target, is one common discipline. More frequent tinkering adds cost without reliably adding return.

What happens to the gratuity payout when it arrives

Your gratuity or DEWS balance is paid out when you leave the job, which is the worst possible moment to receive a lump sum. You are between roles, possibly between countries, and the pull toward treating it as a windfall is strong.

One way people handle this is to fix the split in advance, deciding what proportion gets invested before the number is known. If you are moving within the DIFC, a new DEWS account opens under your new employer. The two cannot be merged, but the old balance can stay invested instead of being cashed out.

Where you retire changes the whole calculation

While you are resident here, there is no federal or Emirate-level personal income tax and no capital gains tax on individuals, which is what makes an aggressive savings rate possible. Two caveats matter for planning. US citizens and green card holders are taxed on worldwide income from all sources and must file wherever they live, even when exclusions and credits bring the bill to zero. And your home country may tax investment gains once you become tax-resident there again, sometimes including gains that accrued while you were away. The timing of a return and the timing of any portfolio restructuring belong in the same conversation.

If you intend to stay, treat residency as a planning input. The federal retirement visa runs for five years and requires you to be at least 55 with at least 15 years of work behind you, plus either property worth AED 1 million and savings of AED 1 million, or an annual income of at least AED 180,000 from any source, inside or outside the country. Applications made from Dubai carry a higher income threshold of AED 240,000. Dubai also runs its own Retire in Dubai routes through GDRFA and the Land Department, so check the pathway that applies to you before fixing on a number.

Five ways retirement planning goes wrong for UAE expats

Treating one apartment as a pension

A single Dubai property is one illiquid asset in one city, exposed to one rental market. If it sits empty, your retirement income that year is zero.

Holding the plan in cash

Dirham deposit rates look reasonable until inflation is subtracted, and what remains has historically trailed the long-run return on a diversified portfolio. Past performance is not a reliable indicator of future results, and investments are not deposits. Cash serves a different job in a plan: the emergency fund, and money earmarked for spending within about five years.

Waiting for an employer scheme

If your employer joins the MoHRE savings scheme, that beats an unfunded promise. It still contributes at 5.83% and 8.33%. So does DEWS. Those are severance rates.

Signing a 25-year plan you will cancel in year four

Illiquidity costs real money when your career involves moving countries.

Ignoring the last five years

A market fall the year you retire does more damage than the same fall a decade earlier, because you are selling into it. That is what the de-risking glidepath is for.

Where wealth advisory services fit

Cusp Wealth Ltd is regulated by the DFSA. Clients build and manage their own portfolios through the platform, with wealth advisory services from human advisers available for the decisions that are hard to make alone: setting a target, choosing a glidepath, and planning around an eventual exit from the UAE. Availability of advisory services is subject to onboarding and eligibility, and the suitability of any portfolio depends on your own circumstances. Investment accounts are USD-denominated.

The platform is Shariah-certified by Amanie Advisors, acting as an external certifier. That certification applies to the platform itself and the methodology to filter Shariah-compliant investments and does not extend to individual instruments or to client portfolios. Shariah-compliant portfolios available — screened for Shariah compliance and diversified across asset classes. Shariah portfolios generate profit, which is variable and not guaranteed.

Your capital is at risk and you may get back less than you invest. Investments are not bank deposits and are not covered by any deposit protection or compensation scheme. Fees and charges apply and will reduce returns; see the full schedule of fees at [FEE SCHEDULE LINK] before investing.

Frequently asked questions

Is end-of-service gratuity a pension? 

No. It is a severance payment calculated on basic salary and length of service, with the total capped at two years' wage. It is generally understood as seed capital for a retirement portfolio, or as a buffer between jobs, rather than as a retirement income in itself.

How much of my salary should I be saving for retirement in the UAE? 

There is no universal answer, and the right figure depends on your circumstances. As a general benchmark, planning literature commonly cites 15% to 20% of gross income for someone with 25 to 30 years to go, with a higher figure for a later start. Starting later means saving more. The absence of personal income tax is what makes a higher rate achievable here than in home markets that tax earnings before you ever see them.

Can I contribute more to DEWS than my employer does? 

Often, though not automatically. Voluntary contributions come out of salary and are set up through the DEWS app, and the option only appears if your employer has enabled it, so check with HR first. The money is yours rather than your employer's, but access while you are still employed is capped at two partial withdrawals a year of up to 30% of the voluntary pot each. That limit is a relevant consideration for anyone thinking of routing a large share of their savings through it.

What happens to my DEWS balance if I leave the UAE? 

You can request a full or partial withdrawal once you leave service, paid locally or internationally. You can also stay invested and claim later, which is an option for anyone who does not need the cash immediately and would only be reinvesting it elsewhere.

Does the MoHRE savings scheme replace my accrued gratuity?

No. Gratuity accrued before your enrolment date is calculated under Article 51 as at that date and paid separately when you leave. Only contributions from the enrollment date forward go into the investment fund.

Should I keep contributing to my home-country pension while I'm in the UAE? 

It depends on the country. Some systems allow non-resident contributions with tax relief, some allow voluntary state pension top-ups that are cheap relative to the benefit, and some offer nothing once you leave. Eligibility is best confirmed early, because the answer often changes what the rest of the plan has to do. This is a question for a qualified adviser in the relevant jurisdiction.

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