Retirement is a time that many look forward to - a period where years of hard work and savings finally culminate in a well-deserved break. However, recent data sheds light on a concerning reality: LGBTQ+ individuals face a higher risk of experiencing financial difficulties during their retirement years compared to the general population.

The latest retirement report from insurer and pension provider Scottish Widows highlights these disparities, painting a stark picture of the challenges that lie ahead for a significant portion of the LGBTQ+ community.

According to the research, nearly half of LGBTQ+ people in Britain are projected to struggle to afford basic necessities such as heating and food when they reach retirement age. This alarming statistic is attributed to a projected median income of just £13,000 per year for LGBTQ+ retirees. This stands in sharp contrast to the national average retirement income, which is slightly higher at £14,000 per year. The implications of this income gap are profound, as 44% of LGBTQ+ individuals are not on track to meet even the minimum retirement lifestyle standards, putting them at risk of not meeting their basic needs during their retirement.

Scottish Widows' National Retirement Forecast delves into various aspects of retirement preparations, revealing disparities in savings and pension plans. For instance, the report found that 36% of LGBTQ+ individuals were not members of any pension scheme, compared to 30% in the wider population. This lack of pension participation underscores a concerning trend that requires attention.

Part of the issue stems from an earnings and pensions participation gap. Research shows that LGBTQ+ employees earn around £7,000 less than their heterosexual counterparts, contributing to a stark pay gap. This wage discrepancy has a ripple effect on retirement preparations, as lower earnings translate to diminished savings and contributions to pension plans. Furthermore, the report highlights that 82% of LGBTQ+ individuals are worried about the rising cost of living, compared to an average of 75%. These economic concerns compound the challenges they face in adequately preparing for retirement.

Beyond financial disparities, the LGBTQ+ community also faces vulnerabilities that impact their retirement prospects. A striking 80% of those who identify as LGBTQ+ have one or more vulnerable traits, such as lacking support structures, experiencing physical or mental health conditions, or taking on new caring responsibilities. These factors can hinder their ability to save for retirement and navigate financial challenges effectively.

Stephanie Fuller, CEO, Switchboard – the LGBT+ Helpline, said:

“The findings of the Scottish Widows Retirement Report, sadly, do not come as a shock to me. LGBTQIA+ people are more likely to have experienced being estranged from family networks than their heterosexual counterparts; this often means that tomorrow’s money is spent today rather than saved for the future.

“It’s also a reality that many LGBTQIA+ people will have to change jobs more often and have experienced periods of insecure income due in part to their sexuality or gender identity. Within the experiences of the community is also the reality that trans people will often have to fund many of the gender-affirming procedures they need personally and at significant cost.

“In 2021, 19% of calls to Switchboard were from people aged 50 and over, with many expressing concerns over their futures and entering later life with limited resources and anxiety around returning to the closet in social care settings.”