Is it harder for LGBT + people to build up a pension?
June is internationally considered LGBT + pride month, so International advisor sought to shed light on some of the issues the community faces when it comes to managing their finances.
In this article, we take a look at how difficult it can be for community members to build a large enough pension.
It is not uncommon to hear of gay men, in particular, who grew up in the 1980s during the HIV / AIDS epidemic and cashed in their savings and / or pensions because they believed that they wouldn’t live to retirement.
Medical advances now mean that people living with HIV / AIDS have a lifespan comparable to those who are not.
Other members of the LGBT + community have said they feel unwelcome by the financial services industry; uncomfortable disclosing details of their personal lives to life insurers and pension companies – some failing to list their partner as a beneficiary for fear of discrimination.
But that was then. Things must be different now, right?
According to Fran Bailey, partner at consultancy LCP, the LGBT + community faces two major obstacles leading to retirement: position in the labor market and the impact of family responsibilities.
She said HAVE: “In terms of wages, there is evidence from YouGov that LGBT + employees, on average, earn lower wages than their heterosexual counterparts.
“A number of cross-country studies have also found that these differences differ across the LGBT + spectrum, with lesbians tending to have higher wages and gay men lower wages on average than their heterosexual counterparts, while the The income gap between trans and cisgender people is even more distant.
“When it comes to family roles, caring for a child can often impact a parent’s retirement prospects due to interruptions in paid work. In the past, where it was perhaps less common for LGBT + families to raise children, this factor would have less impact on their retirement prospects.
“But for the younger generation, with a growing number of LGBT families with children, an unintended consequence may be that it makes it harder for them to build up as much retirement as in the past.”
The advisory industry – and the financial services industry more broadly – still has a reputation for being “pale, masculine and stale”.
And the expectation that the industry is unwelcoming – whether that is correct or not – has kept people in the community from saving for their retirement.
Greater equality in the workplace and an improved inclusive environment is expected to close the income gap over time. Although not as quickly as needed or wanted.
An increasing number of young people from all walks of sexuality and gender identity are working in financial services, which should give the industry a more welcoming atmosphere.
But for the older generation, who may be less financially secure, the message must be that it’s never too late to start saving for your retirement. And it’s by helping to get this message across that the financial advisory industry can truly prove its worth.