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The gender gap in retirement


The word poverty evokes a stark picture of life in retirement. 


That is the reality facing a disproportionate number of women in Australia as a result of the ongoing inequality in our workplaces.

Given the advances feminism has brought to our society and the broad acceptance today of equal rights and equal pay it was confronting to read a research white paper compiled by ANZ on the barriers to achieving financial gender equity.

It is true that great strides forward have been made by women in terms of education - 42 per cent of women aged 25-29 hold a university degree versus 31 per cent of men - and that there are more women in the labour force now than ever before. But there remains a long way to go given that women in full-time roles earn, on average, $295 a week less.

Clearly there are a broad range of societal factors at play here and the chief executive of ANZ’s Global Wealth business, Joyce Phillips, used the launch of the research white paper to call for leadership on a range of issues that could shift the status quo and address the inequities that hold many women back.

The three key drivers of financial gender inequality the research highlighted were:

  • Fields of study/career choices and pay gaps
  • The gendered nature of caring responsibilities
  • Discrimination and structural bias

The conclusion was that those factors combine to prevent women from contributing to their superannuation and growing their retirement savings in the same way as men.

The impact on retirement incomes of women is clearly significant.

Women typically have about half as much in their super account as men and as a result 90 per cent of them will retire with inadequate super.

One quite chilling statistic in the research was that one in five women yet to retire has no superannuation at all. But of course in years past it was not uncommon to hear of young women cashing out their super when they were starting a family.

If women are in an enduring relationship they will have access to the combined retirement savings or income of their partner. Which is fine for women in that situation, but the report also says a significant proportion of women in Australia today choose to live alone. An additional factor at play of course is the high level of divorce which can be financially crippling regardless of gender.

The good news when it comes to retirement for women is that they will typically live longer. The downside is that because of their lower retirement savings/earnings they are much more likely to be totally dependent on the age pension.

The ANZ study highlights the issues facing women and the barriers they confront in achieving financial equality. While the problem is broader than just the superannuation system, part of the answer has to be getting women focussed on super and the value of long-term savings. In terms of equity measures, retaining the low income super contribution is one small step that could help redress the balance.


By Robin Bowerman
Smart Investing 
Principal & Head of Retail, Vanguard Investments Australia
03 August 2015

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