At Australian Retirement Trust, we’re committed to supporting all of our members to reach their retirement goals. While factors like the gender super gap provide additional challenges for women, retirement outcomes for women could be improved by:
- the government removing structural inequalities from the economy and superannuation system, as proposed in the ASFA Pre-Budget Submission for the 2022-23 Budget,
- employers amending pay and leave policies to better support the choices and challenges faced by women,
- encouraging spouse contributions, where applicable, to assist spouses in contributing to their partner’s super, and
- individual women taking control of their super and harnessing tax benefits, long-term investment opportunities and government incentives to grow their super savings.
Women’s current economic position
In Australia, women earn on average $262 per week (or 14%) less than men based on Average Weekly Earnings1.
Among a range of other factors listed below, the gender pay gap means that in 2019 women retired with a mean superannuation balance of $289,227 compared to $476,744 for men2. Median balances were lower at $137,050 for women and $178,800 for men, a difference of around 24%3.
Fighting the doom and gloom
While the $187,517 gender gap in mean superannuation balances at retirement measured in 2019 is concerning, it’s also shrinking – in 2015 this gap was $222,2322. Median balances showed the same pattern across the period.
The goal now is to build upon this momentum by further driving and supporting the legislative, social and economic changes and employment opportunities required to address the imbalance. It was improvements across these areas that originally empowered women to increase their proportional participation in the paid workforce in Australia from around a third in 1966 to almost half in 20203. It will be further improvements that will allow us to continue to close the gender super gap.
For our part, Australian Retirement Trust will continue to advocate for improvements to the superannuation system that we believe will make it fairer for all Australians. We’ll also continue to equip our members with the resources, tools, products, advice and support they need to achieve their retirement goals.
Why is there a gap in retirement savings?
There are a range of reasons why women reach retirement with less in super than men including:
- The gender pay gap, discussed above, which means women earn on average $262 per week less than men1.
- Women do almost double the hours of unpaid work per week compared to men2. This means women have less time to dedicate to paid work which can leave them financially vulnerable in cases of divorce or if their partner dies.
- Women are almost three times more likely than men to be working part-time4, and those who earn less than $450 a month don’t currently receive superannuation guarantee (SG) payments.
- Women live 4 years longer than men on average5, which means women are more likely to live in poverty in old age as their smaller super balances must last longer6.
- Women are more likely to retire sooner, with an average retirement age of 52 years, compared to age 59 for men, which may significantly reduce savings capacity approaching retirement, while further exacerbating the need for smaller retirement balances to last longer.
What is the government doing to help?
One action the government has taken to improve retirement outcomes for women is removing the $450-a-month threshold for SG payments.
From 1 July 2022, employers will be required to make SG payments for all eligible employees even if they earn less than $450 per month, which the Government states “…will remove an outdated feature of the superannuation system and in doing so will improve equity in the system.”7
What can women’s partners do to help?
A great way women’s partners can help to minimise the impact taking time out of the workforce to raise children can have on their partner’s retirement savings is to contribute to their super.
To encourage this, the government provides a tax offset of up to a maximum $540 a year (18% of a total contribution of up to $3,000) for spouse contributions if the recipient spouse earns less than $37,000 a year.
Learn more about spouse contributions.
What can women do to improve their retirement outcomes?
Although the gender pay and super gaps may seem daunting, ultimately women can significantly improve their retirement outcomes by sorting out their super and taking advantage of the tax benefits the government offers to incentivise Australians to save for retirement.
Steps women can take to sort out their super include:
- Finding and combining multiple super accounts
- Boosting their super balance through contributions, which may also provide access to a Government Co-contribution of up to $500 p.a.
- Protecting their earning potential with the right insurance
- Making an active investment choice that suits their financial goals
- Meeting with a financial adviser to put a plan in place for their finances
Depending on their level of income, some tax benefits women may be able to access to boost their super include:
- Concessional contributions tax of 15%
- Government co-contributions for low-income earners
- Low Income Superannuation Tax Offset
We’re here to help
1 Australian Government, Workplace Gender Equality Agency (WGEA), ‘Australia’s Gender Pay Gap Statistics’ 27 August 2021. wgea.gov.au
2 Melbourne Institute: Applied Economic & Social Research, The Household, Income and Labour Dynamics in Australia Survey: Selected Findings from Waves 1 to 19 (HILDA), 2021
3 Australian Bureau of Statistics, ‘Changing female employment over time’, released 18 March 2021, abs.gov.au
4 Australian Bureau of Statistics, ‘Gender Indicators, Australia’, released 15 December 2020, abs.gov.au
5 Australian Bureau of Statistics, ‘Life tables’, reference period 2018-2020 released 4 November 2021, abs.gov.au
6 Australian Council of Social Service and University of New South Wales, Poverty in Australia 2020. Part 1: Overview. 2020, povertyandinequality.acoss.org.au
7 Senator The Hon Jane Hume, The Hon Josh Frydenberg MP Treasurer, Joint media release: ‘Parliament passes legislation to enhance the superannuation system’, 10 February 2022, ministers.treasury.gov.au
Disclaimer and disclosure This article has been prepared and issued by Australian Retirement Trust Pty Ltd, referred to as ‘Australian Retirement Trust’. While it has been prepared with all reasonable care, no responsibility or liability is accepted for any errors, omissions or misstatements however caused. All forecasts and estimates are based on assumptions. If those assumptions change, our forecasts and estimates may also change. This article contains general information only. Any advice does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of any advice having regard to your personal objectives, financial situation and needs before acting on that advice. Australian Retirement Trust is not a tax agent and we recommend members consider obtaining their own financial and/or tax advice. A copy of the Product Disclosure Statement (PDS) can be obtained by calling 13 11 84. You should consider the PDS in deciding whether to acquire, or to continue to hold, the product. Australian Retirement Trust Pty Ltd ABN 88 010 720 840 AFSL No. 228975. Australian Retirement Trust ABN 60 905 115 063 USI 60 905 115 063 003