The Retirement Savings Gap You Haven’t Heard About
When most of us think about retirement savings, we picture numbers. How much we’re putting away, whether we’re on track, and what kind of lifestyle those savings will support later in life. But new research suggests that why we save may be just as important as how much we save, and the reasons aren’t the same for everyone.
A new study from PensionBee and The Open University, “A Legacy for the Kids? The Impact of Sexual Orientation on Pension Investment Motives in the UK”, looked closely at the motivations behind retirement saving and uncovered something surprising. While straight and gay men tend to put away similar amounts, the reasons driving those savings are often very different. On the other hand, sexual orientation did not significantly predict saving motives among women.
This isn’t about discrimination, income gaps, or access to accounts. It’s about expectations for the future, especially when it comes to family and dependents.
Same Balances, Different Goals
The research analyzed data from over 28,000 U.K. retirement accounts and surveyed more than 1,300 savers. One of the clearest findings was that sexual orientation doesn’t really affect how much people save. In terms of retirement account balances, gay and bisexual men look very similar to their straight counterparts.
When you dig into why people save, the story shifts. Straight men were much more likely to say they were motivated to save so they could leave money for children or other dependents after they pass away.
For gay and bisexual men, that motivation was weaker, especially among people who don’t currently have children. In other words, even if both groups are putting away the same amount, straight men may be planning financially for future dependents they don’t have yet, while gay and bisexual men are less likely to make that assumption.
As Jonathan Lister Parsons, co-founder of PensionBee, put it. “This suggests straight men without children are still planning financially for potential dependents, while gay and bisexual men without dependents are less likely to factor this into their planning.”
Interestingly, once men do have children or dependents, the difference almost disappears. At that point, the motivation to provide financially for loved ones after death is strong across the board.
Why This “Legacy Planning Gap” Matters
So why does this gap exist? One reason may be expectations about family formation. Straight men often assume they’ll eventually have children and plan their finances accordingly. Gay and bisexual men, on the other hand, may not share that same assumption or may imagine different kinds of family structures.
Dr. Peter Hegarty, the study’s lead researcher, highlighted this point. “Even before having children, straight men appear to be planning financially for dependents they anticipate having in the future.”
This finding might seem like an interesting social detail, but it has real consequences for financial planning and inclusion. If retirement products, tools, and marketing mostly focus on leaving money to children, that messaging could resonate with some people while completely missing others.
