Retirement Planning for Expatriates in the UAE

Introduction

What end-of-service benefits and workplace savings schemes provide, and the planning principles that turn them into a retirement income.

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Last reviewed 24 September 2026 · 5 min read

In short

Expatriates in the UAE have no state pension, so retirement income depends on end-of-service benefits and personal savings. Private sector employees earn gratuity of 21 days' basic salary for each of their first five years and 30 days for each later year, capped at two years' pay, while DIFC employers pay monthly contributions of at least 5.83% or 8.33% of basic salary, depending on length of service, into a funded scheme such as DEWS. Many people treat these benefits as a base and build other savings around them, taking account of the currency and country in which they expect to retire.

Do expatriates get a pension in the UAE?

No. The UAE Government states that there are no pension schemes for expatriate workers. Instead, expatriates are entitled to end-of-service gratuity based on their years of service.

UAE nationals are covered by the national pension system, and employers must register GCC nationals under the social security rules of their home country. For everyone else, building a retirement income is largely a personal responsibility.

How is end-of-service gratuity calculated?

Under Article 51 of the UAE Labour Law, Federal Decree-Law No. 33 of 2021, a full-time private sector employee with at least one year of continuous service is entitled to gratuity when employment ends.

Gratuity is based on the last basic salary, so allowances such as housing and transport are excluded. Employers must pay it within 14 days of the contract ending and may deduct amounts the employee owes. Under the traditional system it is paid as a lump sum at the end of employment rather than invested during the employee's career. The entitlement is:

  • 21 days' basic salary for each of the first five years
  • 30 days' basic salary for each year after the first five
  • a pro-rata amount for part years, once one year has been completed
  • a total cap of two years' wages

What is the voluntary Savings Scheme?

The Ministry of Human Resources and Emiratisation (MOHRE) runs a voluntary alternative end-of-service benefits system, known as the Savings Scheme, under Cabinet Resolution No. 96 of 2023. It applies to private sector employers and employees, including those in free zones other than the financial free zones of the DIFC and ADGM, which run their own arrangements.

The employer decides whether to join and which employees to enrol. Once staff are enrolled, their traditional gratuity stops, and gratuity already accrued must be settled. The main features are:

  • Participating employers pay 5.83% of monthly basic salary for employees with under five years' service, and 8.33% after five years.
  • Contributions go into funds approved by the Capital Market Authority (CMA), with capital-guaranteed, risk-based and Sharia-compliant options.
  • Employees may add voluntary contributions of up to 25% of their total wage.
  • When employment ends, the employee receives the contributions and any returns within 14 days, and may keep the money invested or withdraw it.

How do DEWS and the ADGM rules work?

Since 1 February 2020, employers in the Dubai International Financial Centre have paid monthly contributions into a qualifying scheme instead of accruing gratuity. The DIFC Employee Workplace Savings Plan (DEWS) is one of the approved qualifying schemes. Gratuity earned before that date is preserved.

Abu Dhabi Global Market takes a different approach. Its Employment Regulations 2024 allow an employer to offer a pension or savings scheme as an alternative to gratuity, and an employee who joins such a scheme is not entitled to gratuity unless agreed otherwise.

For DIFC employees, the key features are:

  • employer contributions of at least 5.83% of monthly basic wage for the first five years of service
  • employer contributions of at least 8.33% of monthly basic wage for each additional year
  • voluntary savings on top of employer contributions, with a choice of investment options including Sharia-compliant funds

How do you build a resilient retirement plan?

Workplace benefits form a base, not a complete plan. If you intend to stay in the UAE, you may be able to apply for a five-year retirement residence permit from the age of 55, subject to property, savings or income conditions. Dubai also asks for at least 15 years of work, in the UAE or elsewhere. Our retirement visa guide explains the tests.

Whether you stay or leave, these principles apply whatever your nationality:

  • Diversification: spread savings across asset classes, regions and institutions, so no single market, employer or provider decides your outcome.
  • Currency: the UAE dirham is pegged to the US dollar. If you plan to retire in the UK, Europe or elsewhere, consider how much of your savings should match the currency you will spend.
  • Portability: favour arrangements you can keep, transfer or access if you change employer or leave the UAE, and keep records of every scheme you join.
  • Tax and residence: your tax position may change when you leave the UAE, so take advice in your intended country of retirement before you move.
  • Capacity for loss: match investment risk to the time left before retirement and the income you will need.

Frequently asked questions

Is end-of-service gratuity calculated on my total salary?

No. It is based on your last basic salary. Allowances such as housing, transport and utilities are excluded, so the basic salary stated in your contract directly affects your entitlement.

Can I join the MOHRE Savings Scheme on my own?

Not as an ordinary private sector employee: your employer decides whether to join and which staff to enrol. MOHRE does allow some groups, including the self-employed and freelance permit holders, to register and make voluntary contributions only. Once enrolled, you can add voluntary contributions of up to 25% of your total wage.

Does a DIFC employer still pay gratuity?

For service from 1 February 2020, DIFC employers pay monthly contributions of at least 5.83% or 8.33% of basic wage into a qualifying scheme such as DEWS instead of accruing gratuity. Gratuity for service before that date is preserved.

Should my retirement savings be in dirhams or my home currency?

It depends on where you will spend your retirement income. Because the dirham is pegged to the US dollar, dirham savings carry the same exchange rate exposure against sterling or the euro as US dollar savings. Holding assets in the currency you expect to spend is one way to reduce that risk, but the right mix depends on your circumstances, so take personal advice.

How Indigo Group can help

Indigo Group can help with retirement planning, tax planning and risk profiling for expatriates and UAE residents through our Wealth Management team. We review your end-of-service entitlements alongside your wider assets, and plan for the country where you intend to retire. For an overview of how we work with expatriates, see financial advice for expats in Dubai. Indigo Group's regulated entity, Indigo Financial Analysis and Consultancy LLC, is licensed by the UAE Capital Market Authority (CMA), licence no. 706042.

Read more about our retirement planning and independent wealth management in Dubai.

To talk this through, book a consultation or message us on WhatsApp.

Written by

Colin Lynam

Managing Director

Colin is an experienced wealth manager with extensive knowledge of the GCC.

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Last reviewed 24 September 2026. This article is for general information only and does not constitute financial, legal or tax advice. Rules change, so please speak to a qualified adviser about your circumstances.

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