Abu Dhabi has moved to ease debt pressure on low-income retirees by waiving more than AED834 million in interest and profit payments on loans owed by 2,339 citizens across the country, in one of the largest targeted financial relief measures for retired borrowers this year.The initiative, directed by President Sheikh Mohamed bin Zayed Al Nahyan and overseen by Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, will be implemented through the Defaulted Debts Settlement Fund in cooperation with major banks and financial institutions.
The relief covers retirees aged 50 and above with limited income. Banks will write off future interest and profit obligations on eligible loans, while beneficiaries will continue repaying the principal under facilitated repayment schedules. Covered borrowers will be contacted directly by participating lenders, removing the need for separate public applications at the initial stage.
The measure comes ahead of Eid Al Adha and forms part of wider social stability efforts linked to the UAE’s Year of the Family 2026, which has placed household resilience, financial security and family cohesion at the centre of public policy. Officials have framed the programme as a direct intervention to reduce the strain of borrowing costs on citizens whose fixed retirement incomes make them vulnerable to repayment pressure.
Abu Dhabi Commercial Bank Group accounts for the largest share of the waived amount, with AED655 million. First Abu Dhabi Bank will waive AED150 million, while Abu Dhabi Islamic Bank will waive AED18.5 million. Emirates NBD Group and Emirates Islamic Bank will contribute AED6.7 million, Dubai Islamic Bank AED2.3 million, Commercial Bank of Dubai AED792,000, Sharjah Islamic Bank AED716,000 and the National Bank of Ras Al Khaimah AED566,000.
The structure of the programme is significant because it does not cancel the underlying principal owed by borrowers. Instead, it reduces the total cost of repayment by removing interest or profit charges that can accumulate over time and prolong financial distress. For retirees, particularly those with limited post-employment income, that distinction could still provide substantial relief by lowering repayment burdens and improving household cash flow.
The Defaulted Debts Settlement Fund has become a key instrument in the UAE’s approach to citizen debt management, working with lenders to restructure obligations, settle distressed liabilities and protect vulnerable borrowers from deeper financial instability. Its latest move highlights a policy model that blends state direction, banking-sector participation and targeted welfare support rather than relying solely on direct cash transfers.
Bank participation also reflects the role of the financial sector in national social programmes. Lenders are being asked to absorb foregone interest and profit income, but the initiative also helps reduce the risk of prolonged arrears among borrowers with limited repayment capacity. By preserving principal repayment while easing future charges, the mechanism seeks to balance social support with banking-sector discipline.
The relief also sits within a broader pattern of financial and housing assistance for citizens. Abu Dhabi approved a AED1.54 billion housing package for citizens this week, including housing loans and exemptions for senior citizens, retirees with limited income and families of deceased citizens. Together, the measures point to a wider emphasis on reducing household liabilities at a time when living costs, loan servicing and family obligations remain major concerns for lower-income groups.
For beneficiaries, the immediate effect is expected to be a clearer repayment path and lower long-term debt exposure. Retirees on fixed incomes often face limited options when debt-servicing costs rise or when family expenses increase. Removing interest and profit charges can shorten repayment horizons and help prevent further defaults, while structured schedules allow lenders to continue recovering principal in an orderly way.
The initiative is also designed to reinforce family stability, a policy priority repeatedly linked to the country’s social welfare agenda. Debt pressure can affect household spending, intergenerational support and access to essential needs, particularly for older citizens supporting dependants or managing health and housing costs. Targeted debt relief for retirees therefore carries both financial and social implications.
The selection of beneficiaries aged 50 and above reflects the UAE’s focus on citizens who have left or are nearing the end of formal employment and may face fewer opportunities to increase income. The limited-income condition narrows the programme to borrowers considered most exposed to financial hardship, helping to distinguish the scheme from broader loan relief measures.
Topics
UAE