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Education Occupies 40% of Saudis' Savings Plans

An international survey reveals that most of the income of GCC parents goes to cover study and education expenses (Asharq Al-Awsat)
An international survey reveals that most of the income of GCC parents goes to cover study and education expenses (Asharq Al-Awsat)
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Education Occupies 40% of Saudis' Savings Plans

An international survey reveals that most of the income of GCC parents goes to cover study and education expenses (Asharq Al-Awsat)
An international survey reveals that most of the income of GCC parents goes to cover study and education expenses (Asharq Al-Awsat)

A recent survey commissioned by Zurich International Life (Zurich), part of Zurich Insurance Group, revealed that only 4 out of 10 parents in Saudi Arabia have a savings plan dedicated to educating their children.

According to the survey, a copy of which was obtained by Asharq Al-Awsat, 32 % of parents resort to their personal savings to pay for school fees, while 22% of them rely on personal loans.

Conducted in partnership with research firm YouGov in July 2022, the survey covered over 1,500 GCC residents across the UAE, Saudi Arabia, Qatar, and Bahrain. It also included parents and married residents across various income groups, occupations, age groups, and gender.

“Our recent survey has unearthed interesting insights including the fact that a good 62 % of parents in the GCC use their monthly income for school-related expenses while the majority of others rely on personal savings or loans,” said Rayner Britto, Head of Distribution at Zurich International Life.

“With the increasing cost of education and uncertainties of life, parents should seriously consider investing in a structured savings plan to support their child’s education. Always back your education savings plan with life insurance cover, which fully protects you and secures your child’s future,” added Britto.

“43% of the parents surveyed said that a better understanding of education savings plans and their benefits would motivate them to invest in the same,” noted Britto.

Most of those surveyed from Saudi Arabia stated that tuition fees are a source of great concern.

The results of the survey showed that the average annual cost of education is SR14,400 ($3,800), at a time when tuition fees constitute 40% of the monthly income of 7 out of 10 couples in Saudi Arabia.

The study also revealed that levels of trust were not high as only 30% of the Saudi population were confident that they would be able to financially support their children’s additional education.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.