Something genuinely different happened in the UAE recently. The UAE new saving scheme launched by the Ministry of Human Resources and Emiratisation changes how end-of-service benefits actually work. Instead of waiting years for a lump sum payment, the UAE new saving scheme lets that money grow through professional investment management.
For people working in the UAE, this represents a shift from traditional gratuity to something closer to a retirement investment account. The UAE new scheme means your end-of-service money doesn’t just sit idle, it grows.
How the UAE New Saving Scheme Actually Works
Traditional gratuity meant employers calculated your end-of-service pay based on your final salary and years worked. You got it when you left. The UAE new saving scheme changes this completely.
- Monthly contributions instead of lump sum, employers contribute monthly to approved investment funds on your behalf. The scheme treats this like ongoing investment rather than deferred payment.
- Professional fund management, your contributions go into funds regulated by the Securities and Commodities Authority. The scheme ensures your money gets managed by professionals who know what they’re doing.
- Returns compound over time, instead of static money, the UAE new saving scheme means your end-of-service benefits grow through investment returns, dividends, and compounding.
Who Can Join the UAE New Saving Scheme
Initially designed for private-sector workers, the saving scheme expanded to cover way more people.
- Private sector employees, if your employer opts in, you’re automatically enrolled in the scheme. You don’t get to choose whether to participate.
- Self-employed and freelancers, people with freelance permits can voluntarily join the scheme through additional contributions.
- Government entity workers, non-UAE nationals working in government-linked entities can participate in the UAE new saving scheme.
- UAE nationals, Emiratis in public and private sectors can use the scheme alongside their pension and social security participation.
Additional Contributions to the UAE New Saving Scheme
Employees can boost their savings beyond employer contributions. The saving scheme allows additional voluntary contributions up to 25% of your total annual salary
These extra contributions in the saving scheme mean faster wealth accumulation. You control how much extra you add based on your financial situation.
What Happens to Old Gratuity Under the UAE New Saving Scheme
Workers keep gratuity earned before enrollment. The saving scheme doesn’t erase what you already earned, it calculates your existing gratuity based on years served up to enrollment date.
From enrollment forward, the scheme replaces the traditional system. All future contributions follow the new investment model.
At employment end, you receive both amounts, old gratuity calculated traditionally plus new savings with investment returns from the scheme.
Accessing Your Money From the UAE New Saving Scheme
When employment ends, you get 100% of employer contributions plus all investment returns earned. The UAE new saving scheme gives you choices about what happens next.
- Immediate withdrawal, take everything out when you leave your job. The scheme allows full access to your funds.
- Keep it invested, leave money in the fund to continue growing even after employment ends. The saving scheme doesn’t force immediate withdrawal.
- Transfer to new employer, when changing jobs, transfer your scheme savings to the fund selected by your next employer.
Benefits of the UAE New Saving Scheme
- Protection from inflation – traditional gratuity loses purchasing power over years. The UAE new saving scheme counters this through investment growth.
- Safety from employer bankruptcy – if your employer goes bankrupt, your saving scheme funds remain protected in the investment account.
- Transparency – you can track your UAE new saving scheme balance and see how your money grows throughout employment.
- Lower costs for employers – contributions under the scheme are based on current basic salary, not the higher end-of-service salary, reducing employer costs.
Supervision Process
Two authorities jointly oversee the saving scheme, MoHRE handles employment-related matters while SCA regulates fund performance and investment activities.
Financial free zones oversee local compliance within their jurisdiction for the saving scheme.
Withdrawal Process
After employment ends, follow standard MoHRE permit cancellation procedures. The saving scheme disbursement happens through established channels once your work permit gets cancelled.
Why the UAE New Saving Scheme Matters
The UAE new saving scheme transforms end-of-service benefits from static payment to dynamic investment. For long-term workers, the UAE new saving potentially delivers significantly more money than traditional gratuity.
The UAE new saving scheme aligns UAE employment benefits with global retirement savings models while maintaining local regulatory oversight.
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