April 2025 numbers from the
Bureau of Labor Statistics revealed that the median weekly wage of a typical employee in the United States is $1,001. The
Human Rights Campaign analysed this data and found that on average, for LGBTQ+ workers, earnings were around $900 a week. This wage gap equates to LGBTQ+ employees earning 90 cents on the dollar, with LGBTQ+ people of colour, transgender women and men and
non-binary individuals earning even less.
Alongside this, 2019
Williams Institute analysis of
Behavioral Risk Factor Surveillance System (BRFSS) data found that 22% of LGBTQ+ adults in the US live in poverty, in comparison to 16% of their heterosexual and cisgender counterparts. While 29% of transgender adults and 29% of cisgender bisexual women
are classed as living in poverty, 40% of Black transgender adults and 45% of Latine transgender adults are more likely to live in poverty than any other race.
- LGBTQ+ White workers earn 97 cents for every dollar the typical worker earns.
- LGBTQ+ Latine workers earn 90 cents for every dollar the typical worker earns.
- LGBTQ+ Black workers earn 80 cents for every dollar the typical worker earns.
- LGBTQ+ Native American workers earn 70 cents for every dollar the typical worker earns.
- LGBTQ+ Asian/Asian Pacific Islanders workers earn $1.00 for every dollar the typical worker earns.
- Men in the LGBTQ+ community earn 96 cents for every dollar the typical worker earns.
- Women in the LGBTQ+ community earn 87 cents for every dollar the typical worker earns.
- Non-binary, genderqueer, genderfluid and two-spirit workers earn 70 cents for every dollar the typical worker earns.
- Trans men earn 70 cents for every dollar the typical worker earns.
- Trans women earn 60 cents for every dollar the typical worker earns.
- API LGBTQ+ women earn $1.00, or about the same as the typical worker.
- White LGBTQ+ women earn 96 cents for every dollar the typical worker earns.
- Black LGBTQ+ women earn 85 cents for every dollar the typical worker earns.
- Native American LGBTQ+ women earn 75 cents for every dollar the typical worker earns.
- Latine LGBTQ+ women earn 72 cents for every dollar the typical worker earns.
The wage, and in turn, the wealth gap is stark. LGBTQ+ individuals face a significant wealth gap compared to their heterosexual and cisgender counterparts, experiencing lower average incomes and higher poverty rates. This disparity extends to various aspects
of financial wellbeing, including homeownership, retirement savings and overall wealth accumulation. This Finextra long read series will focus on how the fintech industry can serve underrepresented LGBTQ+ customers during and after Pride Month – a celebration
of the LGBTQ+ community and the contributions of lesbian, gay, bisexual, transgender and queer culture.
More data needed to improve housing access for LGBTQ+
Williams Institute data surmises that in comparison to non-LGBT people, “LGBT people appear to be more likely to face housing unaffordability, are less likely to
own their homes and are more likely to be renters, and are more likely to be homeless.” Further, nearly half (49.8%) of LGBT adults own their homes, compared to 70.1% of non-LGBT adults and similar to the wage gap statistics detailed above, this trickles down
to homeownership where it is evidently lower among LGBT racial minorities.
According to
Urban research, the first step in improving homeownership rates across the LGBTQ+ community is to gather more data. While federal surveys and data sources are currently used to analyse the demographic and economic characteristics of renters, homebuyers,
and homeowners, this data does not include information on sexual orientation and gender identity and expression (SOGIE).
This is expanded on in an article published in
the Michigan Business & Entrepreneurial Law Review, ‘Constructing the Yellow Brick Road: Preventing Discrimination in Financial Services Against the LGBTQ+ Community Financial Services Against the LGBTQ+ Community’.
“In 1998, L.1 Rosa, a transgender woman, encountered discrimination when she tried to obtain a mortgage application. At the bank, an employee refused to provide an application because the clothing Rosa wore did not conform with the birth gender that was
listed on her identification. Or imagine how Adola DeWolf and Laura Watts, a lesbian couple, felt as they faced the threat of foreclosure when they tried to update mortgage documents to recognize their partnership because the bank did not recognize domestic
partnerships.”
“Several recent studies have asserted the existence of discrimination against the community via analysis of Home Mortgage Disclosure Act (HMDA) data of same-sex applicants as a proxy for LGBTQ+ applicants. One study found that for non-objective reasons,
same sex applicants were charged between 0.02%-0.20% more interest than similarly situated opposite-sex applicants. While there are already some legal protections against this type of discrimination, this article argues that they are insufficient and that
more concrete protections are needed.”
What are these protections? What can the fintech industry do to remedy these issues? By designing inclusive onboarding and KYC processes, financial players can support the LGBTQ+ community by recognising chosen names and gender identities. In the example
shared above, documentation that allows non-binary gender markers, chosen names, and preferred pronouns, even if they differ from legal documents, would have helped.
By reducing friction for transgender applicants with clear, respectful processes for those who have legal documents in transition or inconsistent due to name or gender marker changes, this can help to improve the number of LGBTQ+ that own homes. Training
algorithms and staff to use inclusive data strategies and recognise or mitigate bias is also crucial for ensuring LGBTQ+ communities are included.
Alternative data required to improve credit scores
LGBTQ+ people are less likely to have high credit scores that would qualify them for the best offers for mortgages and loans. In a 2019
CLEAR report, LGBTQ+ adults were two times more likely than non-LGBTQ+ adults to report Poor or Very Poor credit scores (16% vs. 8%). In addition to this, over a third of LGBTQ+ people who
had submitted applications for credit were turned down (35% vs. 21% of non-LGBTQ+). Similar to the wage, wealth and housing gap, LGBTQ+ women and people of colour are more likely to have a Poor or Very Poor credit score, and as a result, be turned down for
a loan or offered less credit than they wanted in the past year.
Going beyond traditional credit scoring, many LGBTQ+ individuals may face challenges building credit due to discrimination, financial exclusion, or a history of informal or unstable employment. By incorporating alternative indicators such as rental history,
utility payments, and digital financial behaviour such as regular savings or subscription consistency, can help to provide a more accurate and fair assessment of creditworthiness.
Lower income + higher cost of living = lower retirement savings
The combination of lower incomes and higher costs of living often translates to lower retirement savings. For
instance, in 2022, “LGBTQ+ workers had a median retirement savings of approximately $14,000, significantly lower than the $51,000 median for non-LGBTQ+ workers. Additionally, only 15% of LGBTQ+ workers had saved over $250,000 for retirement, compared to
26% of their non-LGBTQ+ counterparts.” Additionally, because the federal government did not recognise LGBTQ+ marriages until relatively recently and as mentioned, average incomes are lower, LGBTQ+ employees may have lower Social Security benefits to support
their retirement.
The LGBTQ+ community is also statistically less likely to be married, impacting financial planning and inability to reap the benefits of retirement vehicles that provide mechanisms to transfer accounts to spouses tax-free. However, without a spouse, these
tax advantages may not apply, potentially leading to higher taxes on inherited assets. Pensions may also not be available to non-married spousal beneficiaries, which can leave them without crucial financial support.
Improving LGBTQ+ retirement savings requires addressing both structural inequities and the unique life experiences that impact financial planning within the community. Fintechs, policymakers, and employers all have a role to play. Employers should ensure
retirement plans (like 401(k)s or pensions) include access for all employees, regardless of marital status or gender identity, and offer spousal/partner benefits for same-sex couples.
Fintech platforms can personalise projections and advice to reflect the specific goals and situations of LGBTQ+ users (e.g., later life transitions, chosen families, caregiving responsibilities). Financial education content and human advisors should also
be trained on LGBTQ+ issues, such as how Social Security or inheritance laws apply differently depending on relationship status and location.
The financial inequality faced by the LGBTQ+ community is not just a matter of dollars and cents. It reflects decades of structural discrimination, policy gaps, and exclusion from traditional financial systems. From lower wages and higher poverty rates to
reduced access to homeownership and retirement savings, LGBTQ+ individuals, especially transgender people and LGBTQ+ people of colour, are disproportionately impacted across every stage of the financial journey.
As fintech firms rise to reshape the financial landscape, they are uniquely positioned to lead the way in creating more inclusive, equitable services. By designing digital products that respect diverse identities, leveraging alternative data to improve credit
access, and tailoring advice for non-traditional family structures and life paths, fintechs can bridge the gap where legacy systems have failed. This is not just a matter of inclusion, it’s a business imperative and a moral responsibility.
Pride Month is a powerful reminder of how far we’ve come, but it’s also a call to action. The fintech industry must ensure that financial inclusion doesn’t end with rainbow branding in June. It must be embedded into the design, delivery, and data of every
financial product, every day of the year.