LGBTQ+ Retirement Crisis: Nearly 50% at Risk of Struggling to Afford Basics After Leaving Work
New data from the UK highlights a troubling retirement crisis faced by individuals who identify as LGBTQ+. The research reveals that close to half of LGBTQ+ individuals are at risk of struggling to afford basic necessities like food and heating once they retire.
The latest retirement report from insurance and pension provider Scottish Widows indicates that 44% of LGBTQ+ individuals are not on track for a minimum retirement lifestyle, as defined by one of the main pension bodies. This means they face the risk of not being able to cover their needs during their older years. In comparison, the national average for people falling below this threshold is 35%.
The study also found that 36% of LGBTQ+ people were not members of any pension scheme, whereas the figure stood at 30% for the wider population. Additionally, 18% had reduced their contributions to pension plans and similar schemes due to rising living costs, higher than the 12% of the wider population.
These concerning statistics have caused worry among LGBTQ+ individuals, with 68% expressing concerns about running out of money in retirement, compared to the national average of 57%.
According to the report, the median projected retirement income for LGBTQ+ individuals is around £13,000. To provide a benchmark, the Pensions and Lifetime Savings Association has developed retirement living standards that indicate three different levels of retirement: minimum, moderate, and comfortable. For example, a single person would require approximately £12,800 per year to meet the minimum threshold. The moderate and comfortable thresholds are £23,300 and £37,300 per year, respectively.
The minimum scenario leaves pensioners with only £54 per week for food (including meals outside the home), no car, and an annual budget of up to £580 for clothing and footwear. These figures assume that the individual has paid off any mortgage.
Emma Watkins, a managing director at Scottish Widows, stressed the need for employers and the pensions industry to do more in reaching out to LGBTQ+ community members and helping them achieve a decent retirement lifestyle. She expressed concern about the fact that almost one in five individuals from the community had felt compelled to reduce their pension contributions.
The insurer also pointed out that LGBTQ+ individuals earn less on average and experience higher rates of mental health conditions. This can lead to the need for time off work, reducing opportunities to save money for pensions.
Switchboard, an LGBTQ+ helpline, highlighted the multifaceted financial issues faced by the community. Factors such as estrangement from family networks, frequent job changes due to sexuality or gender identity issues, and the personal funding required for gender-affirming procedures are significant challenges. These realities often lead to LGBTQ+ individuals exhausting their financial resources, leaving limited options for resolving the issue.
In light of this data, it is crucial to address the LGBTQ+ retirement crisis by providing better support systems and opportunities for community members. Efforts must be made to bridge the income gap, tackle discrimination, and ensure equal access to financial resources and retirement planning. Only by addressing these issues can we alleviate the financial burdens faced by LGBTQ+ individuals as they approach retirement.
Overall, this research highlights the urgent need for societal changes and proactive measures to address the retirement crisis faced by the LGBTQ+ community in the UK. By implementing inclusive policies and offering adequate support, we can work towards providing a secure and comfortable future for all individuals, regardless of their sexual orientation or gender identity.
