Despite Australian women’s superannuation balances growing, they still remain well behind their male counterparts.
New figures show a significant increase to female super balances driven by women working more, earning more and being in the super system for longer, but despite this many retirees now are still heavily reliant on the Age Pension once they stop work.
New data released by the peak super body, the Association of Superannuation Funds of Australia, found from the 2015-16 financial year women now have a larger chunk of retirement savings — average balances for men are $111,853 (up by 14 per cent) compared to women at $68,499 (up by 25 per cent.)
This is up from 2013-14 when men had $98,535 and women had $54,916.
In percentage terms women have about 39 per cent of total superannuation savings — well behind men who have about 61 per cent.
ASFA’s chief executive officer Dr Martin Fahy said it remained a “worry” that female super balances were still lagging well behind their male counterparts.
“The worry is that is that do we have to go through a generation of impoverished female retirees on the poverty line before we actually do something about this,’’ he said.
“If we want to reduce the burden of the aged pension and keep it for those who are in most need of it for a safety net then actuarially global evidence shows we have to get to (compulsory contributions of) 12 per cent, the sooner we get there the better.”
In Australia the superannuation guarantee — compulsory super payments by employers — is now at a rate of 9.5 per cent and is legislated to increase to 12 per cent by July 2025.
The controversial $450 per month threshold where superannuation isn’t required to be paid unless this is met has remained a long-term issue for the industry, with arguments many women who work few hours a week or have multiple jobs never reach this amount and thus fail to contribute to super.
As one of the nation’s largest super funds, AustralianSuper’s group executive Paul Schroder said despite the slight closing of the gender gap with super balances it “remained a big problem.”
“The area people should be worrying about includes women who are increasingly finding it difficult to own their own home,’’ he said.
“If people can save a bit more it would make a big difference, if a 35-year-old could save $50 a month extra that will have $79,000 more at retirement.”
So how can you tuck away a little bit more for your future? We explain how here.