Close to half of individuals who identify as LGBTQ+ are heading for a retirement where they are at risk of struggling to afford such basics as food and heating, according to new UK data.
Looking across various measures including amounts saved and pension scheme membership, researchers concluded that members of the LGBTQ+ community were “far more likely than the general population” to struggle in retirement.
The insurer and pension provider Scottish Widows’s latest retirement report found that 44% of people who identify as LGBTQ+ are not on track for even a minimum retirement lifestyle, as defined by one of the main pension bodies, which means they are “at risk of not covering [their] needs” when they are older. That contrasts with the national average of 35% of people who risk falling below the threshold.
The research also found that 36% of LGBTQ+ people were not a member of any pension scheme, compared with 30% of the wider population.
Meanwhile, 18% had cut contributions into pension plans and similar schemes because of rising living costs – compared with 12% of the wider population.
The insurer said that, “unsurprisingly”, 68% of people from the community were worried about running out of money in retirement, which was higher than the national average of 57%.
Its report stated that the median projected retirement income among people who identify as LGBTQ+ was £13,000.
The Pensions and Lifetime Savings Association has developed the “retirement living standards” to show what life in retirement looks like at three different levels – minimum, moderate and comfortable – with a single person needing about £12,800 a year to meet the “minimum” threshold. The thresholds for moderate and comfortable are £23,300 and £37,300 a year respectively.
The minimum scenario leaves a pensioner with only £54 a week for food (including food away from the home), no car, and up to £580 a year for clothing and footwear. These figures assume the individual has paid off any mortgage.
Emma Watkins, a managing director at Scottish Widows, said employers and the pensions industry needed to do more to reach members of the LGBTQ+ community and help them achieve a decent retirement lifestyle.
The fact that almost one in five people from the community had felt the need to reduce their pension contributions “is a huge area of concern”, she said.
The insurer also said that LGBTQ+ people earn less on average and suffer a higher rate of mental health conditions, making them more likely to need time out of work and therefore reducing opportunities for putting money into pensions.
Stephanie Fuller, the chief executive officer at Switchboard, an LGBTQ+ helpline, said: “These findings are concerning but sadly do not come as a shock.
“The financial issues faced by the community are indeed significant and multifaceted. LGBTQIA+ people are more likely to be estranged from family networks, for instance, and feel it necessary to change jobs more frequently due to issues arising from their sexuality or gender identity.
“There is also the reality that many trans people will have to fund the gender-affirming procedures they need personally and at significant cost. All this means that tomorrow’s money is often spent today, with few obvious avenues for people to remedy this.”
