Over half (55 per cent) of individuals who identify as LGBTQIA+ are on track for a retirement lifestyle below the Pensions and Lifetime Savings Association's (PLSA) minimum standard, compared to 35 per cent of the general population, research from Scottish Widows has revealed.

This suggests that 44 per cent of LGBTQIA+ people will struggle to afford basics such as food and heating in retirement, versus the national average of 35 per cent.

The report acknowledged that this is partly the result of a persistent earnings gap, with LGBTQIA+ people earning around £7,000 p.a. less than their heterosexual and cis counterparts, while higher rates of mental health conditions (34 per cent compared to 8 per cent for the wider population) could also play a role, forcing savers to take time out of work and thus reduce opportunities for pension contributions.

However, Scottish Widows also found that a "worrying" 36 per cent of LGBTQIA+ people are not a member of any pension scheme at all, compared to 30 per cent of the wider population.

Furthermore, 18 per cent of LGBTQIA+ people have reduced their contributions to pensions and similar schemes because of rising living costs, up from 12 per cent of the wider population.

"Unsurprisingly", the research found that those who identify as LGBTQIA+ were also more concerned about running out of money in retirement, with 68 per cent fearful of this, compared to 57 per cent of the wider population.

In addition to this, 82 per cent of LGBTQIA+ people say they are worried about the rising cost of living, compared to 75 per cent of the wider population.

Commenting on the findings, Scottish Widows managing director, retirement and longstanding, Emma Watkins, stated: “There are major issues around retirement planning across the UK, but it’s particularly acute for the LGBTQIA+ community.

"The fact that one in five LGBTQIA+ people have felt the need to reduce pension contributions is a huge area of concern. It points to the wider inequalities they face when trying to save for retirement.”

“Employers and the pensions industry must take greater responsibility to reach members of the LGBTQIA+ community and support them to achieve the retirement lifestyle they want. It isn’t enough to help them overcome these hurdles – we must remove the obstacles altogether.”

Adding to this, Switchboard (LGBT+ helpline) chief executive, Stephanie Fuller, said: "These findings are concerning but sadly do not come as a shock. “In 2021, 19 per cent of calls to Switchboard were from people aged 50 and over, with many expressing concerns over their future, entering later life with limited resources, and potentially feeling forced to return to the closet in social care settings.

“The financial issues faced by the community are indeed significant and multifaceted. LGBTQIA+ people are more likely be estranged from family networks, for instance and are forced 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.”

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