With Pride Month in full swing, it’s important to reflect on the diverse issues this campaign highlights. Every year in the UK, people from the LGBTQ+ community come together to celebrate their pride in their sexual orientation or gender identity while also advocating for acceptance and equality.
At My Pension Expert, one less discussed area that’s very important to us is the disparity in pension outcomes faced by LGBTQ+ individuals. Pension poverty is a significant issue across the UK, but within the LGBTQ+ community, there is a growing concern over their retirement prospects.
Recent research from Scottish Widows’ latest Retirement Report revealed that people who identify as LGBTQ+ are less likely to be on track to afford even a basic retirement lifestyle (55%, average 63%) and are also less likely to be on track for a comfortable lifestyle (34%, average 38%).
So, what’s behind this disparity in retirement planning?
Unequal footing
Just over two decades have passed since the Employment Equality (Sexual Orientation) Regulations became law in the UK, making it illegal to discriminate against employees on grounds of sexual orientation in the workplace. Despite progress regarding LGBTQ+ rights since then, figures still show workplace gaps between people from this community and their cisgender counterparts.
A 2019 YouGov survey reported that lesbian, gay, bi, and trans workers are paid an average of nearly £7,000 per year less than their non-LGBTQ+ colleagues, representing a 16% pay gap. Moreover, in the UK, gay or lesbian applicants are 5% less likely to be invited to an interview than heterosexual applicants.
Naturally, pay gaps mean LGBTQ+ employees often have less disposable income. Therefore, they might feel less financially secure and have less money to set aside for the future, leading to inadequate retirement savings down the line.
Unfortunately, LGBTQ+ individuals are also more likely to need to switch jobs and be estranged from family networks. Without a solid financial safety net, savings may be put towards short-term necessities rather than pension contributions.
Taking the time to listen
Fighting discrimination in the workplace, whether through reduced job opportunities or pay gaps, is central to achieving pension equality. That’s why it’s important to champion inclusivity and learn from the LGBTQ+ community, not just during Pride Month but throughout the year, to support underserved communities best.
It’s important that all organisations within the financial services sector take note and continually strive to be a space that fosters trust and allows everyone to feel supported.
At My Pension Expert, we are committed to promoting inclusivity and ensuring all our advice recognises the unique financial situations and challenges faced by people from various backgrounds. We take the time to listen and understand a person’s individual financial circumstances, needs, and retirement ambitions. Through this, we are truly able to understand the needs of our clients and can create a retirement plan that suits their current financial needs, as well as their future goals.
As we celebrate Pride Month, we also look forward to supporting our local community at Doncaster Pride 2024, which will be held at Town Field on August 10th. Events like these remind us of the importance of inclusivity and community support.