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Too many women retire without enough super - here’s how to fix it

older woman doing super calculations
Women tend to retire with less superannuation than men but that's slowly changing. (Source: Getty)

Early in my career when I had my first daughter, paid parental leave was uncommon, superannuation contributions were lower, and the gender pay gap was wider than it is today.

Even though I’m now more established with my eldest daughter almost 18, with these disparities, I’m reminded that the pace of change is still too slow.

The reality is that many women who enter the workforce at the same time as my daughters will find that by retirement, their savings still lag those of a man who starts in a similar position to them.


Supporting women of all ages to access affordable financial advice and boost their superannuation balances will be critical to erasing these gender-biased differences and making meaningful progress towards closing the gender pay gap.

Change is underway but it’s too slow

Change is happening but not nearly as fast as it needs to. Alarmingly, women are the fastest growing group of retirees living in poverty in retirement.

Nothing happens without action. Collectively, we are slowly breaking the bias that sees women at a financial disadvantage throughout their lives.

The gender pay gap is slowly closing. Superannuation contributions increased to 10 per cent in July 2021 and will rise to 12 per cent by 2025, which will boost everyone’s retirement savings. And, from July this year, the $450 a month threshold on superannuation guarantee payments will be scrapped, giving people in part-time work and those who have multiple jobs the benefits of super.

Removing that $450 threshold will be significant for women, who are almost three times more likely than men to work part-time, according to the Australian Bureau of Statistics Gender Indicators.

We ran the numbers on a typical 30-year-old woman with $50,000 in super, who spends 10 years working part time earning $449 a month before returning to full time employment earning $60,000 a year up to age 67. She will retire $12,616 better off having received super payments on her part-time earnings than someone in the same situation who didn’t receive those contributions.

There’s still a big pay gap

These changes will make a big difference to my daughters when they begin their careers but there is still a big gap to close.

The gender pay gap sits at 22.8 per cent, according to the most recent Workplace Gender Equality Agency (WGEA) gender equality scorecard.

Superannuation is a percentage of pay – if you are paid less, you receive less super – so the top priority for breaking the bias that leaves women at a financial disadvantage throughout their lives is to fight for pay equality.

Analysing over 750,000 Colonial First State member balances, we found a 17.4 per cent gap between men’s and women’s superannuation balances – slightly less than the 17.8 per cent difference a year ago, but still significant. The rate of progress in closing the gap is still too slow and more action is needed to fix it.

Taking time off to have kids can set women back financially

Another factor limiting women’s retirement savings – that I have experienced personally – is taking time out of work to raise children. In almost nine out of ten cases, it’s women who take primary parental leave, according to WGEA.

Three in five employers now offer employer-funded paid parental leave, WGEA figures show. Of those, four in five also pay superannuation for parents while on paid leave but only 7 per cent pay superannuation on both employer-paid and unpaid parental leave.

Balance booster

The Association of Superannuation Funds of Australia (ASFA) is proposing that the Government should pay a $5000 baby bonus into the primary carer’s superannuation fund because it would boost women’s retirement savings.

ASFA calculated that such a payment could bolster a woman’s super balance by $11,000 per child at age 67.

Any extra contributions to superannuation play a role. Here, CFS member data clearly shows the value of financial advice. In every age group, women who receive financial advice contribute more to superannuation than those who do not receive advice. The biggest difference is among 25- to 29-year-old women, where advised women contributed 148 per cent more than non-advised women.

Extra contributions make an enormous difference to retirement outcomes, particularly at younger ages when women have time on their sides for compound interest to work its magic.

Supporting women of all ages to access affordable financial advice will be critical to improving long-term outcomes.

Nothing happens without action. If we work to close the gender pay gap, improve access to paid parental leave and boost retirement savings – especially in those critical early years – while supporting women of all ages to save more for their futures, we can look forward to greater financial equality for women throughout their lives to retirement.

Kelly Power is the chief executive officer of superannuation at Colonial First State.