Retirement savings are getting fatter but women are still behind

AUSTRALIAN women are still getting ahead and earning more in one area even though the gender pay gap puts them still behind men.

The superannuation balances of women still remain significantly behind men.

AUSTRALIANS’ superannuation balances are fattening and women are slowly getting a bigger slice of the retirement pie but 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.

The superannuation balances for women have increased but they are still behind male balances.

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.)

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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.

ASFA chief executive Dr Martin Fahy said the super guarantee needed to reach 12 per cent sooner.

“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.”

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In Australian 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.

Compulsory super payments are currently 9.5 per cent in Australia.

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.

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.”

AustralianSuper group executive Paul Schroder said tipping in extra to super can make a big difference.

“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.”

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Originally published as Retirement savings are getting fatter but women are still behind