How being LGBTQ+ can affect your money, from higher property costs to lower salaries and smaller pensions.
Having a gender identity outside of the “norm” means you are likely to encounter several inequalities
Pride Month is a time for celebrating the LGBTQ+ community and shining a light on areas that are often overlooked – such as how sexual orientation or gender identity interacts with a person’s ability to thrive financially.
While everyone grapples with money and no one finds it easy to increase their pay, build a decent retirement fund or reach their financial goals, LGBTQ+ people can face additional barriers.
That is not to say that all LGBTQ+ people are worse off or face the same issues. It does mean it is important to recognise that, despite all the progress that’s been made for LGBTQ+ equity and inclusion, even today life paths that differ from “the norm” and the impact of discrimination in the past or present all come with a cost.
In other ways, being LGBTQ+ just means having additional things to consider when it comes to financial planning.
Here are some of the factors that may affect an LGBTQ+ person’s finances.
The data gap
It is difficult to build a full picture of how being LGBTQ+ affects a person financially because population data has typically been gathered using traditional definitions of “male”, “female”, “husband” and “wife”. What we know about people’s earnings, tax, pensions, credit scores, mortgages – virtually every aspect of money – is based on this assumption of a gender binary.
There is increasing recognition these data models don’t tell the full story and things are changing – for example, the Census asked about gender identity and sexual orientation for the first time in 2021 – but it will take time before the data gap is bridged.
Academic studies from around the world are filling part of the data gap. Some findings include:
- Women in same-sex relationships may experience a double penalty from the gender pay gap
- Additional costs involved in gender-affirming care
- Lack of financial support from disapproving family
- Higher costs involved in starting a family
