Financial factors impacting the LGBTQ+ Community

By Sharon Bonfield, Propositions Manager at St. James’s Place.

Ahead of Pride Month, we explore some of the persistent challenges that LGBTQ+ people face with wealth accumulation – and what can be done.

LGBTQ+ people face a host of unique challenges and considerations when it comes to their finances – from the higher costs of starting a family to a disproportionate risk of mental-health problems, which can impact earning potential and decision-making around finances.

To find out more, we speak to two experts: Emma Palethorpe, Head of Change (Asia) at St. James’s Place and Chair of the SJP LGBTQ+ Network; and Matt Cameron, Founder and Managing Director of LGBT Great, an advocacy organisation and membership community that champions LGBTQ+ equity in the financial-services industry.

How might being LGBTQ+ affect people’s financial plans?

Emma explains, “One of the common themes we’ve seen at SJP is around same-sex partnerships. Not marrying will impact your spousal rights in terms of pensions. If one of you dies and you’re not married, the rights to the pension may not get passed across.”

Matt goes on to say, “The barriers and challenges that LGBTQ+ people face are different, depending on which part of the community they come from, and other aspects of identify such as race and gender may create additional barriers.

Here in the UK, there’s an issue around inheritance planning. LGBTQ+ couples are less likely to be in civil partnerships or marriage – especially a lot of older LGBTQ+ couples, who don’t want to get married because the institution of marriage has excluded them for so long. So, it’s really important they have a Will (formally leaving assets to their intended beneficiary).

Also, if you’re moving abroad with a spouse to a country that doesn’t recognise same-sex marriage, that can impact on your husband or wife having access to your pension (if you die). It’s very complex.”

What about additional expenses?

“As a same-sex couple, having a family is often more expensive. Whether you go down the IVF or the surrogacy route, you have to factor this into your financial goals and planning.” continues Emma.

Matt explains, “If you want to go through surrogacy, chances are it’s going to cost you £100,000. That needs a plan. If you’re (transgender and) planning to transition, it’s going to involve a long and rigorous process over many years and time away from work – again, that needs a plan.”