Closing the gender superannuation gap
Women are retiring with a third less super than men
Australia’s gender pay gap has been stuck between 13% and 19% for two decades with women still paid less than men in many industries, despite more modern laws and changing attitudes.
The pay gap translates into a much bigger superannuation gap of around 30% when women retire. This lack of retirement savings is largely the result of smaller pay packets compounded by broken work patterns when women take time out to care for others, especially children.
On average, women currently retire with $67,000 less than men.
Several generations of working women now remain significantly behind in their retirement savings because the pay gap has persisted so long. Social research company Ipsos reports that women in their late 30s and 40s are especially anxious they will not have enough super to fund their retirement.
Unless we tackle the issue head-on, the gender super gap is estimated to still exist out to 2061 and beyond.
The sooner we can rebalance our super system to make it fairer for all, the better the long-term retirement outcomes for all Australians.
Women vs men
Due to the gender pay gap and being more likely to have a career break to raise children, women contribute less to their super than men over their career. That means less money for retirement.
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What are the problems?
A number of factors contribute to poorer retirement incomes for women:
- Women are more likely to have fragmented work patterns of paid work when women take primary responsibility for family care. For example, taking 5 years off work from age 29 – 34 is estimated to shave $100,000 off women’s average retirement savings.
- A majority of part-time and casual workers are women in generally lower paid positions.
- Women disproportionally work in administrative roles, community services and sales which historically pay less than male dominated occupations.
- Fewer women occupy senior executive and board level positions.
- Women typically retire earlier than men on average and live longer than men - on average about 4 years longer for a woman born today.
What are the solutions?
The onus shouldn’t be on women to fix the problem, especially when most don’t have the means to do so. Government action is needed to make super fairer for women.
Make sure there are no further delays in increasing employer super contributions to 12%.
Pay super on parental leave, like all other types of leave.
Ensure tax concessions are fair and equitable.
What can I do?
Boost your super
Despite the gender super gap, there are steps you can take to boost your own your super so you’ll have more in retirement. And remember, the younger you start, the more you’ll have. To find out more visit here.