The gender pay gap

The gender pay gap in Australia is a serious concern. With traditionally more time out of the workforce than men, women have a harder time building their superannuation and the impact needs to be recognised. By shining a light on the issues, AustralianSuper hopes to contribute to a better retirement outcome for women.

In a report that looks at the stories of 40 women and their super, AustralianSuper has looked to uncover how gender inequality to date has affected women as they approach retirement, and in retirement.

A series of structural inadequacies, and varied dynamics over the course of a woman’s life can lead to superannuation poverty.

Some reasons include:

• The gender pay gap. On average, women earn $241.50 a week less than men.
• Research shows women are more likely to take time off to care for children, elderly parents or family members with special needs. Superannuation isn’t a mandatory part of paid parental leave or carers payments.
• Almost half of women work part-time and many chose lower paid work to prioritise their caring responsibilities.
• Unpaid caring makes women particularly vulnerable if there is an unexpected life event like divorce or the death of a partner.
• Women live four to five years longer than men with less retirement savings.

The gender super gap starts with the pay gap

The gender pay gap in Australia is at 14%. On average, men are paid $83,050 a year and women receive $68,220. AustralianSuper data shows the impact of the gender pay gap on super starts at an early age.

18-29 years-old male members have an average balance of $10,166, while females have just $8,408. But the biggest shift happens at age 28 – a time when many start a family.

Data from the Household, Income and Labour Dynamics in Australia Survey (HILDA) shows at age 28 female incomes flatline at around $1000 – $1,250 a week (on average), while male earnings steadily increase to over $2,000 a week before age 40.

The double penalty

Time out of the workforce and returning part-time has a big impact on your superannuation savings, but it can also slow career progression and future earning potential. It’s known as the superannuation ‘double penalty effect’.

Divorce and separation

Time out of the workforce for unpaid caring work can leave women vulnerable if there is an unexpected life event like divorce or the death of a spouse.

One in three marriages end in divorce, and single women are most at risk of poverty in retirement.

The Future Face of Poverty is Female report found the impact of divorce was particularly significant when career sacrifices were made on the promise of a shared financial future.

Closing the gender super gap

There is no quick fix, but AustralianSuper research shows lifting the superannuation guarantee from to 12% by 2025, as legislated by the Australian government, will go a long way to closing the gender super gap.

Taking actions for a better future

While women are at a disadvantage when it comes to retirement savings, there are steps you can take to catch up when you can.

A Women in Super Guide developed by AustralianSuper has a range of tools, information and simple steps you can take to help boost your super balance.

This information may be general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement available at australiansuper.com/pds. or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/tmd. AustralianSuper Pty Ltd, ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.