As the revived Pensions Commission begins its work on inequalities and shortfalls within the pensions system, Travers Smith’s Daniel Gerring and Savannah Adeniyan take a look at the retirement savings gap that exists for LGBTQ+ people.
There is increasing recognition within the pensions industry of a significant gap between pension expectations and outcomes – a gap that disproportionately affects women and many minority groups. High-quality research is essential to closing this gap and ensuring that all individuals, regardless of background, can look forward to a secure retirement.
In the meantime, there are practical steps that can be taken to improve outcomes. This article focuses on the LGBTQ+ pensions gap, examining its causes and how employers and others can address it.
The government’s recent decision to revive the Pensions Commission to review the adequacy of current arrangements for future retirees presents a timely opportunity for positive, practical change across the industry.
While some argue that the LGBTQ+ spectrum is too broad for effective community-wide solutions, we disagree. Diversity exists within every minority group, and it is both possible and necessary to recognise the specific challenges faced by different identities – for example, women impacted by both gender and sexuality – while also addressing issues that affect the wider LGBTQ+ community.
Recent research by Barnett Waddingham demonstrates that LGBTQ+ people often have distinct retirement needs and expectations compared to the wider population. Notably, 38% of transgender respondents (compared with 5% of cisgender respondents) did not expect to live beyond age 67, which correlates with findings that 70% of transgender people surveyed are living with a long-term health condition.
Support for LGBTQ+ employees goes beyond financial considerations. Nearly three-quarters (73%) of LGBTQ+ respondents said they would find a social community set up by their pension provider helpful. This likely reflects the report’s finding that LGBTQ+ individuals are more likely to be single, childfree, and cut off from their families compared to non-LGBTQ+ people.
These findings are further supported by Stonewall research indicating that three in five lesbian, gay, and bisexual people lack confidence that social care and support services would understand or meet their needs.
Practical steps for employers to support LGBTQ+ staff
Employers’ priorities will vary depending on size, sector, and workforce demographics. However, one practical recommendation is to enhance the collection of employee diversity data. This data is crucial in guiding decisions about where support and guidance are most needed.
Forms of support might include signposting relevant external resources, such as the LGBT Foundation’s Pride in Ageing programme, or collaborating with organisations like Stonewall to implement more targeted initiatives.
Reviewing and updating employee benefits is also important to ensure they reflect contemporary family dynamics, including the use of inclusive terminology for same-sex parents and broadening health-related leave provisions.
Access to comprehensive physical and mental health support will be particularly important for LGBTQ+ employees, especially for transgender and ethnic minority individuals who are statistically at higher risk of depression. Making it easier to access health-related benefits and providing appropriate workplace adjustments to support those with long-term health conditions are also key steps.
By taking these practical measures, employers can create more inclusive workplaces and support better retirement outcomes, empowering LGBTQ+ employees and other minorities to build longer, healthier, and more secure careers.
Much remains to be done to close the pensions gap and improve retirement outcomes for all. Industry-wide collaboration, including through groups such as O:pen, will be crucial to developing effective solutions.
Daniel Gerring is a partner, and Savannah Adeniyan is a pensions associate, at Travers Smith. They are writing as organisers and supporters of the O:pen network, which promotes and celebrates LGBTQ+ diversity and inclusion within the pensions industry.
