From our perspective, we face three key challenges in our region. Firstly, there is a lack of public education on savings and pensions; secondly we simply do not save enough and thirdly, there is an over reliance on public pensions schemes and state support, which over the long-term is not sustainable. As a result, we believe there is a potential ‘savings time bomb’ on the horizon.
To illustrate this point, unlike western markets where public education on the need to save has been actively promoted for decades, within our region this is, culturally, a relatively new concept with a savings and pensions industry still very much in its early days. 
Worryingly, almost 30 per cent of MENA citizens save nothing, 28 per cent of Gulf Co-operation Council (GCC) employees do not save, with almost 50 per cent saving less than 10 per cent of their salary. This trend has major repercussions for all of our citizens in terms of managing both short-term unexpected expenses through to longer term issues such as planning for retirement. 
In addition to this lack of a ‘savings culture’, government public pensions are under duress. Our view is that government-sponsored retirement schemes (which currently represents approximately 33 per cent of the MENA labour force) are coming under increasing financial pressures with more retirees from an ageing population living longer, aided by advances in medical care.
Public pension reform is, therefore, unavoidable . Added to this, final pensions are dependent on career, years served and salary histories and often due to these factors can be much less than expected, which in turn has significant financial repercussions on the employee’s retirement life if the pension is the only source of income.
In the west, the trend has already been the transferral of retirement financing from government and employer to the individual and in due course (all depending on looming medium to long-term economical challenges) aspects of this model will become more prevalent in our region. As a result, an individual’s responsibility for their finances will come to the fore with comprehensive financial planning and personal savings becoming of prime importance for our citizens.
As a region, we do need public education initiatives to address the need for citizens to save both for now and for the long term, which will provide future generations with firm guidance.
In terms of the future, our view is that every citizen should have a personal ‘savings pot’, which is theirs to own and to manage and which is not subject to the control of others, and this is true for both nationals and expatriates. These savings should be actively managed to provide peace of mind that there is a financial cushion in place, which will not only help navigate any short-term emergencies but also provide an additional source of income in later years to supplement public/private pensions.
We therefore encourage everybody to take control of their own finances and to actively research the types of investment and savings vehicles that are available. Saving plans can be started with very small monthly investments, which with time can grow into a significant savings fund so everyone should seek the benefits of these saving platforms.
In terms of choosing a savings provider, potential clients should ensure that the firm is well regulated and funded, utilises the best international investment partners as well as providing comprehensive investment choices which includes conventional and sharia-compliant options, in addition to the ability to monitor and manage these investments.
In conclusion, as a region, we simply do not save enough and this is true for both nationals and expatriates with the same repercussions for both - the inability to cover unexpected financial emergencies and crisis through to the lack of funds to support both themselves and their families in later years and to enjoy the lifestyles they have become accustomed to. There is a critical need for change within our saving culture if we are to avoid severe repercussions, and the key is public education and awareness in addition to encouraging the growth of a domestic savings and pensions industry.
Ebrahim K Ebrahim is chief marketing & communications officer at TAKAUD, a long-term savings and pensions business headquartered in Bahrain.