Moving to Saudi Arabia can be an exciting and life-changing decision, offering opportunities to experience a unique culture, benefit from tax-free income, and work in a rapidly developing economy.
However, as an expat in Riyadh or elsewhere in Saudi Arabia, financial planning can be complex.
Proper financial advice is essential to ensure your wealth grows, you comply with legal requirements, and you plan for your future.
In this post, we’ll explore the key financial considerations for British expats moving to or living in Saudi Arabia, share two case studies, and provide a useful table summarising key advice points.
Why Financial Advice is Crucial for Expats in Saudi Arabia
Navigating the financial landscape in a new country can be overwhelming.
From understanding local regulations to managing international investments to make sure you are tax compliant, having expert guidance is essential.
Financial advisers help bridge the gap between your financial goals and the complexities of expat life.
British expats often face unique challenges, including managing their UK tax obligations, making the most of their savings, and ensuring a smooth transition when returning to the UK.
Professional advice can transform these challenges into opportunities.
Key Financial Considerations for Expats in Saudi Arabia
Tax-Free Income
One of the biggest draws for expats in Saudi Arabia is the tax-free income.
While this is a significant financial benefit, it doesn’t exempt you from tax considerations in the UK.
If you’re deemed a UK tax resident, your global income could still be taxable.
Working with a financial adviser ensures you stay compliant while maximising your tax-free benefits.
How is UK residency determined?
Savings and Investments
Saudi Arabia’s tax-free income provides an excellent opportunity to save and invest.
However, in the absence of familiar savings products such ISAs, alternative solutions will need to be found.
A tailored strategy can help you grow your wealth during your time abroad.
Retirement Planning
While living in Saudi Arabia, it’s important to plan for life after work.
You can start by making sure that your UK State Pension contributions remain on track.
You can also consider making contributions to your UK private pension for the first 5 years in Saudi Arabia (find out how here).
Aside of that, your traditional, i.e. pension, options for saving for retirement are limited.
However, there are other ways that you can build up funds in a tax-efficient manner in order to provide for you and your family in the future.
Currency Exchange and Transfers
The Saudi Riyal’s peg to the US Dollar offers stability, but transferring money between Saudi Arabia and the UK requires careful planning to minimise costs.
Using specialist foreign exchange services can save you significant amounts compared to traditional bank transfers.
Expat Financial Advice: How do I manage currency risk?
Health and Life Insurance
Saudi Arabia has a private healthcare system, so securing comprehensive health insurance is essential.
Additionally, life insurance policies should be reviewed to ensure they meet your current needs as an expat.
What are my life insurance options when living abroad?
Returning to the UK
If you plan to return to the UK, early preparation is key.
This includes understanding how to repatriate assets, ensuring tax compliance, and adapting your financial plan to suit your changed circumstances.
Case Study: How Mike, an Expat in Jeddah, Secured His Financial Future with Professional Advice
Meet Mike
Mike is a 53-year-old British expat working in Jeddah, Saudi Arabia.
Divorced with two children—a financially independent son and a daughter still at university—Mike has been living and working in Jeddah for the past two years.
Mike earns a solid, tax-free income with most of his expenses covered by his employer.
Mike is aware that he has made some less than optimal financial decisions in the past and is aware that his current situation gives him the perfect opportunity to get his finances back on track and build a secure future.
The Challenge
When Mike moved to Saudi Arabia, he set a goal: to stay for 10 years, save as much as possible, and retire in Thailand.
In his first two years, Mike saved an impressive £120,000.
However, this money was sitting idle in a low-interest deposit account because he wasn’t sure what to do with it.
Mike knew he needed a financial plan to make the most of his expat years, but he didn’t know where to start.
Enter the Independent Financial Adviser who Specialises in Working With Expats
Mike decided to meet with a UK-qualified independent financial adviser (IFA) specializing in expat financial advice.
After a thorough review of his situation, they worked together to create a comprehensive plan tailored to his goals and circumstances.
The Solution
With professional guidance, Mike now has:
A Robust Financial Plan
Mike knows how much he needs to save to retire comfortably in Thailand.
His adviser helped him set realistic goals and create a roadmap to achieve them.
Smart Investing
Mike’s savings are now invested in a low-cost, well-diversified portfolio designed to grow his wealth while managing risk.
This means his money is finally working for him.
UK State Pension Contributions
To ensure he maintains his UK State Pension entitlement, Mike is making voluntary National Insurance contributions.
This small step secures a valuable income stream in retirement.
An Updated Will
Mike’s will hadn’t been updated since before his divorce. Now, it reflects his current wishes, protecting his assets and ensuring his children are provided for.
The Outcome
Mike feels a sense of relief and confidence he hasn’t experienced in years.
With a clear plan in place, he’s on track to meet his financial goals, retire in Thailand, and enjoy a comfortable future.
Additional Financial Tips for Expats
Here are some additional tips to keep in mind:
- Emergency Fund: Ensure you have enough savings to cover unforeseen expenses, especially in a foreign country.
- Legal Considerations: Understand Saudi laws regarding property, inheritance, and business ownership.
- Family Financial Planning: If you have dependents, factor their needs into your financial strategy, including education costs and healthcare.
Top Financial Advice for Expats in Saudi Arabia
Key Financial Area |
Tips |
| Tax-Free Income | Confirm your UK tax residency status to avoid unexpected tax bills. |
| Savings and Investments | Use offshore accounts for tax-efficient growth. |
| Retirement Planning | Make voluntary UK National Insurance Contributions to maintain your State Pension entitlement. |
| Currency Exchange | Use specialised services to reduce costs when transferring money abroad. |
| Health Insurance | Invest in comprehensive health coverage, as Saudi Arabia’s system is private. |
| Returning to the UK | Plan asset repatriation and tax obligations well in advance. |
The Bottom Line
Life as an expat in Riyadh, Jeddah or other cities in Saudi Arabia can be enriching.
The country is undergoing rapid transformation under its Vision 2030 initiative, opening up new opportunities for expats in various sectors.
However, while the lifestyle is unique, the real benefits are often financial.
With a robust financial plan, your time in Saudi Arabia can set you and your family up for a sound financial future.
Are You an Expat in Saudi Arabia?
If you’re living in Saudi Arabia and need help with your financial planning, we’re here to guide you.
Whether it’s investing your savings, maintaining your UK pensions, or planning your retirement, professional advice can make all the difference.
Contact us today to start planning your financial future with confidence!
