The not-so-super situation for Australian women

Women & super
19 April 2021

We’re passionate about supporting women’s financial wellbeing today and tomorrow. This is the first in a series of articles about women’s retirement outcomes and financial wellbeing. In this article, we explain the gender super gap in detail. See our other articles to learn more about what we’re doing to help bridge the gap and what you can do to take control of your financial future.    

On average, Australian women retire with 47% less super than men,* this means that women retire with an average of $90,000 less in their super accounts than their male counterparts.# It’s a situation that’s leaving many women, particularly single women, facing significant financial disadvantage in retirement. The gender super gap is one of the reasons an estimated 40% of older single women are facing poverty and economic insecurity in retirement, according to national advocacy and networking group, Women in Super.

So, what’s causing the gender super gap? And what can we do to improve the retirement outcomes for Australian women?

The super gender gap explained

According to a Parliament of Australia Report ‘A husband is not a retirement plan’ published in 2017, it's the differences in working experiences between men and women that causes women to have a harder time building their retirement savings. The report found that the most significant contributor to the gap in retirement savings between men and women was total earnings during working life.

A recent article by research agency Rice Warner commented that the report (A husband is not a retirement plan) made 19 recommendations to alleviate some of these problems, most of which have yet to be actioned. 

An uphill battle for women 

Men (on average) earn 13.4% more than women,^ and because super is paid as a percentage of income, men can accumulate more in their retirement savings than women. 
Men’s earnings exceeding those of women isn’t new, the gender pay gap has hovered between 13.4% and 19% for the past two decades, according to the Australian Government Workplace Gender Equality Agency (WGEA).  

Women are also behind from the outset, with female graduates starting their careers earning less than their male peers. The 2020 Graduate Outcomes Survey showed that across all study areas, the median salary for female undergraduates was $63,400, compared to males which was $65,000.** This is an example of the gender inequality that exists within our society and needs to be urgently addressed. 

According to the WGEA, many factors influence the gender pay gap, including: 

  • Discrimination and bias in hiring and pay decisions.
  • Women and men working in different industries and different jobs, with female-dominated industries, like healthcare and social services, attracting lower pay.
  • Lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles.
  • Women taking time out of the workforce for caring responsibilities affecting career progression and opportunities.
  • Women’s disproportionate share of unpaid caring and domestic work.

Bridging the gap

If we don’t address the gender super gap, it’s predicted that by 2030 the retirement savings gap will still be 39%. With average super balances at retirement projected to be $262,000 for women and $432,000 for men.#

So, what can be done to bridge the gap between men and women?

While women can take steps themselves, ultimately Government action is needed to make super fair for women. Women in Super advocates for a super system void of gender-based inequality and as industry partners of Women in Super, we support its policy positions and recommendations, including:  

  • Making sure there are no further delays in increasing the super guarantee to 12%, from the current rate of 9.5% (which will increase to 10% from 1 July 2021) 
  • Removing the rule that those earning less than $450 a month (predominantly women) don’t receive super contributions
  • Ensuring that super is paid on parental leave, just like it's paid on all other types of leave
  • Measure and publish the impact that any future changes to super would have on women
  • Providing women and other low-income earners with an additional $1000 government contribution annually into their super – boosting their balance and helping them make up the gap.

There are also steps you can take today to improve your financial wellbeing in retirement. Find out more about how you can take charge of your financial future here.

On a national level, it’s clear we still have a long way to go to close the gender super gap, but as a super fund, we’re doing what we can. Find out more about what we’re doing to help bridge gap here

Tackling this issue head-on will help to reduce gender inequality in Australia and improve the retirement outlook for future generations of Australian women. 

* Women in Super:  The facts about women and super. 
# Industry super: Closing the superannuation gap.
^Australia’s Gender Pay Gap Statistics 2021. Published 26 February 2021. 
**Quality Indicators for Learning and Teaching: 2020 Graduate Outcomes Survey. Published November 2020. 
^^Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766.