There is some good news on the superannuation gap with women closing in on men in terms of both having superannuation and the average amount available in their balances.
But the gap’s still there. It’s not closing fast enough. And right now, we’re failing to take even the simple steps that could contribute to boosting the superannuation savings of women.
According to new research from Roy Morgan this week, 70.9 per cent of women have superannuation, compared with 66.2 per cent in 2012. That’s seen the gap on balance ownership closing by 3.9 per cent, with 74.8 per cent of men having it in 2012, a figure that remains unchained today.
Meanwhile, Roy Morgan has also found that the average superannuation balance for women has grown faster than men since 2012. For women, it grew by 38 per cent in the past decade to an average $154,000. For men, it grew an increase of 26 per cent, to an average of $216,000.
So what’s seen it closing? According to Roy Morgan, it may come down to an increased focus on the issues and the importance of closing the gap, as well as the need to improve retirement funding for women. That suggests it’s coming down to women taking action themselves, rather than policies or bigger initiatives to address the issues.
On Women’s Agenda, we’ve certainly seen this to be true – with this gap gaining significantly more attention in recent years than a decade ago, and more women seeking to address their personal balances. We’ve also seen the alarming figures on women retiring into poverty – and the stats finding that women aged over 55 are the fastest cohort of homelessness in Australia, to be getting more airtime during discussions on these issues. We hear these figures over and over again, and women are increasingly seeing the risks the personally face financially as they are getting older.
There are a number of contributing factors that create this gender gap including the gender pay gap, and the fact more women are likely to have employment interruptions if they become parents.
Employment interruptions are one explanation – but they shouldn’t be a justification for women retiring with significantly less, especially given these interruptions usually occur in order to undertake unpaid care work, typically when having young kids.
But as Roy Morgan notes, women across all age groups who are currently working have lower average incomes than men, and the average wage for women as a percentage of that earned by men drops for every age groups. Women aged 18 to 24 for example, earn 85.8 per cent of wage of their male counterparts – which is actually the narrowest gap across all age groups. The figure drops to only 70.6 per cent for women aged 65 and over. Roy Morgan finds that this lower average income for women with superannuation is due to the fact nearly half (45.3 per cent) of employed women work part time, compared to 23.5 per cent for men, based on their latest March 2023 employment figures.
As Michele Levine, Roy Morgan CEO notes, there have been significant gains in employment and women’s workforce participation over the past decade – rising from 57.9 per cent in 2012 to 64 per cent in March 2023, but women are still far moe likely to work in part time jobs than men.
“Clearly part-time work is associated with a lower annual income than full-time work and this continues to contribute to the ongoing gender superannuation gap. The latest figures on income show that average female incomes are at only around 76% of the male average, which in turn leads to lower superannuation contributions and balances compared to males,” Levine said.
“In addition to lower average incomes, females are more likely to have interrupted employment. However, despite these negative factors operating against them, women have made gains in closing the superannuation gap to men – although progress is slow and additional policy actions should be seriously considered to close the gender superannuation gap.”
So what next? Roy Morgan notes the policy reform suggestions that have been put forward by Women in Super, including that governments provide an additional $1000 into the accounts of women and low income earners to help boost balances, that the $450 monthly pay threshold which see thousands of women missing out on super contributions each year be removed, and that data on the impact that future super change will have on women in published.
Roy Morgan’s research comes from its Single Source survey, and based on in-depth personal interviews with more than 500,000 Australians over the past decade, including 300,000 with superannuation.