Make your retirement comfortable and colourful

Retirement planning may not sound like the most exciting topic, but it's crucial for absolutely everyone. That’s why we want to shine a light on a recent report from Scottish Widows, which has revealed some unique retirement-planning challenges faced by the LGBTQ+ community. And without action, these challenges could lead to less-than-golden golden years.

We’re here to break this report down for you and offer some tips to help make everyone’s retirement colourful and comfortable.

Understanding the challenges 💪

According to Scottish Widows, a whopping 44% of LGBTQ+ folks aren't on track for a retirement income which covers even the bare minimum living standards, compared to 33% of the general population. Obviously neither of these figures paints a rosy retirement picture, and more needs to be done to ensure everyone can enjoy their later years. But it’s a staggering difference in forecasts based simply on someone’s sexuality or gender identity.

So, what are the biggest retirement-planning challenges faced by the LGBTQ+ community? Because the sooner we understand them, the sooner we can take action!

The pension problem 💰

Opting out of a pension or cutting back on pension contributions seems to be more common in the LGBTQ+ community. This makes for worrying reading as pensions usually provide your main source of income when you retire, and they can be the most cost-effective way to save for retirement.

If you stop paying in, it won’t just be your own money pulled from your pension pot – you’ll also be missing out on tax relief, which is effectively ‘free cash’ from the government, and your employer’s contributions too.

Mind the gaps 🚇

But why are those who identify as LGBTQ+ more likely to opt out or take breaks from paying into a pension? The report highlights the role of a “significant pay gap” many in the community face, which helps to explain the findings that 18% have reduced their savings due to the rising cost of living – that’s compared to 12% in the general population.

Added to the pay gap pressure is an increased risk of vulnerabilities, such as mental health problems or weaker support networks. These vulnerabilities could lead to more time away from work and more time away from paying into a pension.

Steps to brighten your financial future 💡

Given the challenges faced by LGBTQ+ people, it’s little wonder the report finds ‘running out of money during retirement’ can be a greater source of worry compared to the average person. But it’s not all doom and gloom! Awareness about these challenges is improving all the time, and there are lots of little things you can do now to help you secure a radiant retirement. 🌅

Take pride in your pension 🏳‍🌈

All of us should be taking pride in saving for our best lives after leaving the world of work. For some, it might feel too early to be prioritising your pension but the sooner you start saving for retirement, the easier it is.

If you’re employed, it’s worth checking out the situation with your workplace pension. Find out how much you and your employer add to it each month. If you’re worried this might not be enough, see if you can increase your contributions, with your employer potentially matching your increase (‘free’ cash! 💸).

Or you could look into setting up a personal pension – something available to all the self-employed or unemployed out there too. Just keep an eye on your total contributions and make sure you don’t exceed your maximum yearly allowance. It’s worth remembering here, pension rules apply and can change in future and how you’re taxed depends on your own individual circumstances. 

Make financial friends 👩🏼‍🤝‍🧑🏽

As Dodl doesn’t give advice, if you’re looking for more information on pensions, it’s worth checking out Money Helper, the government’s free money guidance service. Or, if you can afford it, you could seek professional and personal advice from a qualified financial adviser.

Money talk isn’t always the hottest topic at the dinner party but bringing it up with people you know and trust can feel like a breakthrough. You could also explore LGBTQ+ organisations and support networks that offer financial education and assistance to help you navigate these financial challenges.

Time to take action 🦸

Planning for retirement might not be the most exciting thing on your to-do list, but it's essential for a comfortable and happy future. By saving and investing through a pension, seeking financial advice and tapping into community support, absolutely everyone can look to make their retirement as vibrant as a Pride parade.

We’ve said it before and we’ll say it again, one of the secrets to financial stability lies in making moves early, even with small amounts. Consider investment apps like Dodl, which offer a low-cost personal pension and straightforward investment choices. By investing just a small portion of your income on a regular basis, you’re taking small financial steps to give your money the best chance to grow through to your retirement! 🌈💰

🔔 Remember this article, like all Dodl articles, is for your info only, and shouldn’t be taken as personal pension advice. Pension rules apply and can change in future and how you’re taxed depends on your own individual circumstances. Finally, the value of investments can change, and you could lose money as well as make it.