Australia’s Superannuation Gender Gap

The “gender gap” in superannuation balances is a persistent issue across Australia. Statistically, men tend to retire with significantly more savings than women, leaving many women financially vulnerable in their later years. But why does this gap exist, and what can be done to close it?

Understanding the Superannuation Gender Gap

As of 2022, women retire with nearly 23% less in their superannuation than men. This difference isn’t just a result of lower wages, though that is a factor. The gap is driven by several interconnected issues.

One of the main contributors is the gender pay gap, which still hovers around 13-15% in Australia. Women, on average, earn less than men, and lower wages naturally result in lower employer super contributions. Compounding this, women are more likely to work part-time or take extended breaks from work for caregiving responsibilities, such as raising children or looking after elderly family members. These breaks can lead to years of missed or decreased contributions, significantly reducing their final balance.

Statistically, women also tend to live longer than men, meaning they need more money to sustain themselves through retirement. With less in superannuation and longer life expectancies, women face a unique set of financial challenges as they age.

Strategies for Women to Boost Their Superannuation

While the superannuation gap may seem daunting, there are several steps women can take to help close the gap and secure a more comfortable lifestyle in retirement.

1. Make Voluntary Super Contributions

One of the most effective ways to boost your superannuation balance is to make voluntary contributions. Even small, regular contributions over time can make a big difference by the time you retire. Women can contribute through salary sacrifice, where pre-tax income is directed into their superannuation, or make personal after-tax contributions. For those eligible, the government co-contribution scheme, where the government matches a portion of your personal contributions, can also be beneficial.

2. Take Advantage of the Spouse Contribution Scheme

For women who take time off work for caregiving, the spouse contribution scheme can be a helpful tool. This allows a working partner to make superannuation contributions on behalf of a lower-income or non-working spouse. Not only does this boost the non-working spouse’s superannuation, but the contributing partner may also receive a tax offset.

3. Consolidate Superannuation Accounts

Many people hold multiple superannuation accounts from different jobs, which can lead to paying multiple sets of fees. Women can benefit from consolidating these accounts into a single fund to reduce fees and better manage their overall superannuation balance.

4. Check for Lost Super

Millions of dollars in superannuation are unclaimed or lost across Australia. If you’ve held multiple jobs over the years, it’s worth checking with the Australian Taxation Office (ATO) to ensure all your superannuation is accounted for. Reclaiming lost super can give your balance an immediate boost.

5. Seek Financial Advice

Speaking with a financial advisor can help you develop a tailored strategy to boost your superannuation. We can guide you through different investment options, ensuring your super is working as hard as it can for you.

Policy Changes on the Horizon

There is growing recognition of the need for systemic change to close the superannuation gap. Proposed policy changes, including paying superannuation on paid parental leave and addressing the gender pay gap, can make a significant difference. While women can take individual steps to improve their super, broader reforms will be essential to achieving true equity in retirement savings.

The superannuation gap between men and women is an unfortunate reality, but it’s not insurmountable. By understanding the factors contributing to the disparity and taking proactive steps, women can work toward building a stronger financial future. While personal action is important, there’s also hope that ongoing advocacy and policy reform will help close the gap for good.