BlackRock’s Investor Pulse survey, one of the largest studies exploring attitudes to saving, investing and retirement, has revealed the financial outlook for British Lesbian, Gay Bi-sexual, and Transgender (LGBT) people for the first time.

In a survey of 4,000 individuals in the UK aged between 25 -74, 213 respondents identified themselves as LGBT. The survey revealed that LGBT women are less positive about their financial future compared to the rest of the population and over half of LGBT men (55%) feel positive about their finances, compared to 40% of LGBT women. In preparing for retirement, six in 10 (58%) LGBT men indicated that they have started saving specifically for retirement compared with under half of LGBT women (47%).

BlackRock’s Investor Pulse Survey found that among non-LGBTs, the 45-54 age group feel least positive about their financial futures, while millennials and retirees feel at their most positive. However, the same phenomenon does not occur within the LGBT community. Here, those aged 45-54 are the most positive about their financial future whereas younger and older LGBTs feel less positive. This is likely to represent a ‘squeezed middle’, as four in 10 (37%) non-LGBTs have financially dependent children compared to two in 10 (21%) LGBTs.  Clearly, this picture is expected to change over time as more and more LGBTs choose to have children and take on the financial impact that children have on the household purse strings.

LBGT men more ‘balanced’ in approach to their savings and investments

Outside of a pension, cash makes up 63% of savings and investments held by LGBT people, marginally lower than the amount non-LGBTs allocate (67%). However, there is a distinct gap between LGBT men and women. The men’s portfolios consist of 57% cash, leading the way for the most diversified group.  Conversely, the proportion of savings and investments held in cash rises to over three quarters (76%) for women. This compares to 73% held by non-LGBT women, making LGBT women the most concentrated in cash.  LGBT women are the least likely to take on risk to achieve higher returns (6%).

LGBTs are confused and worried about retirement

Almost half of LGBTs (46%) are concerned about outliving their savings in retirement and the same percentage claim to find retirement planning confusing. Almost six in ten (58%) are concerned that the state pension will be not be sufficient to meet their future retirement income needs, yet the majority of LGBTs haven’t  started to save towards retirement.

 

Mind the gap

On average, LGBTs desire an annual household income in retirement of £22,000, similar to non-LGBTs who would like £23,000.  However, both LGBTs and non-LGBTs fail to understand the retirement pot they need to grow to meet their income expectations. LGBTs think that a pot worth £194k will be sufficient to meet the income they want in retirement. In fact, the pot they need is closer to £665k, triple that amount*.

Alex Hoctor-Duncan, Savings and Investment Expert and Sponsor of the OUT Network (the LGBT Employee Network at BlackRock), said: “Both LGBTs and non-LGBTs face very similar challenges in ensuring a comfortable retirement, particularly in how they are saving and planning for it.  However, when you dig a little deeper, the survey findings reveal that LGBTs are less likely to have started saving for retirement than non-LGBTs, with LGBT women the furthest behind

“When it comes to cash, we could all learn something from LGBT men. LGBT men hold just over half of their savings and investments in cash compared to the 67% held by the average Brit. This makes them the most diversified when it comes to managing their money

“Interest rates are set to remain at historic lows after the Bank of England cut its benchmark rate from 0.5% to just 0.25%, so savers really do need to question just how much cash they have sat in their bank account and whether it’s working hard enough to meet the income goals they want in later life.”

Natalie has been an LGBT journalist for 12 years and joined the Fyne team in 2001. Her interests outside of work are cycling, running and badminton. She is also studying for a degree in psychology.

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