Why gross figures for Retirement Living Standards?

[dealtn]

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As an aside, it's a shame that banks can't help to inform people around different levels of yearly spending to help in this area. Given that spending from bank accounts could quite easily be grouped into 'sectors' (utilities, retail shopping, online spends, restaurants, etc..) then some form of high-level annual statement covering such groupings and also including overall yearly spending could go some way to regularly informing individuals about their own spending habits and requirements, and making sure such statements make their way through an individuals post-box, which would go some way to educate a similar target-audience to these types of reports, but in a way that is both much more individually tailored, and which also ensures that they actually get to see it every year when it arrives in the post...

I suspect banks can do this. But why would they? What incentivises a business - which is what they are - to invest in something such as this? What's in it for them? Hard to see it being a commercial proposition.

Unless of course you think it a good idea for banks to be able to harvest that data and sell it to 3rd parties. I doubt many would be happy for that to occur.

[silentknight]

There are third-party companies (e.g. Snoop, Emma) that offer something similar but via Open Banking, so clearly they believe there's a commercial proposition.

The issue may be that the percentage of customers interested is small, so it's easier for a separate company to target the whole market than any individual bank.

[Itsallaguess]

‎

As an aside, it's a shame that banks can't help to inform people around different levels of yearly spending to help in this area. Given that spending from bank accounts could quite easily be grouped into 'sectors' (utilities, retail shopping, online spends, restaurants, etc..) then some form of high-level annual statement covering such groupings and also including overall yearly spending could go some way to regularly informing individuals about their own spending habits and requirements, and making sure such statements make their way through an individuals post-box, which would go some way to educate a similar target-audience to these types of reports, but in a way that is both much more individually tailored, and which also ensures that they actually get to see it every year when it arrives in the post...

I suspect banks can do this. But why would they?

What incentives a business - which is what they are - to invest in something such as this?

What's in it for them?

Hard to see it being a commercial proposition.

Without getting into too much of an off-topic discussion about this, there's lots of things that regulated businesses are asked to do that are customer-friendly, a drain on business resources, and not necessarily something that might be seen as a 'commercial proposition' for a given sector.

One good example that's related to my earlier suggestion would be to ask why energy-providers offer yearly energy-usage statements. They're very useful to consumers, but it's not clear what business-benefit an energy-provider gains in calculating and delivering those annual statements.

Regulated industries can be asked to shoulder some burden where it's considered that wider benefits can be delivered to a large consumer-base, and I'd have thought that any responsible government might consider the usefulness of yearly spending-statements that might help people in planning a well-funded retirement in the same way that we might look at our yearly energy-usage statements...

Cheers,

Itsallaguess

[Alaric]

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Given that spending from bank accounts could quite easily be grouped into 'sectors' (utilities, retail shopping, online spends, restaurants, etc..) then some form of high-level annual statement covering such groupings and also including overall yearly spending could go some way to regularly informing individuals about their own spending habits and requirements, and making sure such statements make their way through an individuals post-box,

An analysis of spending from a bank account wouldn't help those who put everything on a credit card or cards and settle at the end of the month. You would need the credit card spending analysis as well.

[SalvorHardin]

IMHO gross incomes for retirement living standards are used for the same reason that gross incomes are used for salary and lifestyle calculations. It's much easier to compare gross with net because this avoids having to take into account taxes and work-related costs which produce the net income. That said some of the retirement costs that these guides include are excessive and often ignore the fact that in retirement you are not paying work related costs, notably National Insurance and commuting.

Many years ago, when I was sometimes involved in giving pensions advice to high net worth individuals, it wasn't unusual to encounter people who expected that their pre-tax pension would be roughly 100% of their gross salary / earnings. When it was pointed out to them that they wouldn't have to pay pension contributions, national insurance, work related costs and the mortgage (in most cases), some would still insist on funding for 100%. It was a status thing for a few; "my income cannot fall on retirement". (probably something to boast about at the golf club or at The Masons).

As others have said, if you're interested in this sort of article it's highly likely that you already have a pretty good grasp as to what your costs are.

[spiderbill]

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As an aside, it's a shame that banks can't help to inform people around different levels of yearly spending to help in this area. Given that spending from bank accounts could quite easily be grouped into 'sectors' (utilities, retail shopping, online spends, restaurants, etc..) then some form of high-level annual statement covering such groupings and also including overall yearly spending could go some way to regularly informing individuals about their own spending habits and requirements, and making sure such statements make their way through an individuals post-box, which would go some way to educate a similar target-audience to these types of reports, but in a way that is both much more individually tailored, and which also ensures that they actually get to see it every year when it arrives in the post...

Cheers,
Itsallaguess

That grouping into categories is exactly what they do in Slovenia's banks. The level of subdivision is quite surprising on all three accounts that I've had (two bank takeovers) and if you maintain the suggested level of detail on each transaction you could easily see where your spending goes. (I generally don't bother as I have a good handle on my spending, but much of it is done automatically anyway.)

The UK banks could learn a lot from European ones - they also have a system of QR codes on most invoices such as utility bills (which are usually sent as pdfs by email); you just open the banking app, scan the code and it captures all the information required to pay the bill at the date it's due and allows you to submit it to the queue for payment. And none of this UK nonsense from the utilities of charging you more if you don't pay by direct debit.

cheers
Spiderbill