Industry Super Australia released a report that states the average Australian woman enters her 60s with a median super balance of just $131,352 compared with $177,882 for men.

The Australian Institute of Superannuation Trustees (ASIT) and Women in Super (WIS) have released a joint statement showing that although women trail men at all ages, the gap is largest between 50 and 54.

The gap has worsened since many women opted for an early release of their super at the height of last year’s COVID-19 pandemic.

Are you in the gap trap?

  • 25-34 year olds have a gap of 21%
  • 35-44 the gap is 35%
  • 45-49 year olds the gap is 37%
  • 50-54 year olds its 44%
  • 55-59 year olds, the gap is 51%

For 25-34 and 50-54 year olds who chose to withdraw some of their super, they now have a gap of 46%, whereas 35-44 and 50-54 year olds have a balance that is 47% lower.

The ASIT & WIS analysis found that women who accessed their super through the early release scheme already had lower balances to start with, which suggests they were mostly low-income women.

AIST Head of Advocacy Melissa Birks said that the COVID early release scheme had increased the structural inequalities in the super system for women who had accessed the scheme.

She said: “Women who accessed their super through the scheme – often because they had no other place to turn to for financial support – are now even further behind the eight ball when it comes to retirement savings.

“In normal times the gender super gap starts to become more evident when many women take a career break to care for their first child in their 30s. Some of these women will be saving for their retirement pretty much from scratch when they return to work.”

Cate Wood, the National Chair of Women in Super shared her sentiment saying that the early release scheme would exacerbate the existing challenges women face.

“We are seeing increasing numbers of older women facing poverty in retirement. We cannot stand by and watch more generations face the same plight. It is important that we act now to ensure that women are at the centre of any post-COVID super or other economic recovery policy measures.”

At the third Women’s Super Summit held last month, Women in Super Chair said, “there was a crisis in women’s retirement happening around us and we do not want the same outcomes for future generations of women”.

Women in Super is calling for the Federal Government to maintain the legislated timetable for increases to the super guarantee (SG), payment of SG on government paid parental leave (PPL), removal of the $450 monthly threshold before super is payable, an additional annual contribution for low income earners, greater focus on gender in superannuation policies.

Industry Super Australia research found that the Federal government’s refusal to pay super on the parental leave scheme costs a mother of two over $14,000 in retirement.

Industry Super Australia Advocacy Director Georgia Brumby asserted that the government needs to act now.

“The Prime Minister needs to stop ignoring the gender super gap – otherwise we will continue to see too many women at risk of retiring into poverty.

“He can start by paying super on parental leave, this super sting hits mothers’ savings hard and is a contributing cause of the gender savings gap,” she said.

Victorian women are worse off with a median super balance of just $41,260 compared with ACT women who have a balance of $67,278 compared with a male median balance of $82,348.

What’s even more shocking is that women retire with no super balance at all according to a 2016 Senate report.

Treasury’s Intergenerational Report concluded that there will still be a gap in 40 years time unless action is taken to reduce the gender gap.

WIS and ASIT will conduct post-COVID industry analysis. They will liaise with interest groups, think tanks, industry bodies and funds, including internationally.

AMP issued a statement last May that said 14% of women cleared out their entire super balance compared with 12% of men. We spoke to AMP’s media spokesman Adrian Howard, who said that these are the most up-to-date figures.

According to the Australian Bureau of Statistics, 325,000 women became unemployed last in April 2020, which reflects 55% of all jobs lost in Australia. Female work hours were cut by 11.5% compared with a 7.5% reduction in male hours.

AMP’s Managing Director, Superannuation, Retirement and Platforms said that their analysis of early super withdrawals reflects the wider effect that COVID-19 is having on female employment.

“We also know that more women have lost their jobs or had their work hours reduced as a result of COVID-19. They are doing it particularly tough at the moment and the early release scheme has been a vitally important initiative to help manage through the crisis.

“What we’re also finding from our analysis is that the early release of super is having a deeper impact on the retirement savings of women.”

She acknowledged that it will be a while before the full effect of COVID-19 on women’s finances are known, but as an industry she wants to support women to navigate the implications of early release, help them protect their wealth and rebuild as the economy recovers.

Financy’s Founder and CEO Bianca Hartge-Hazelman offered some solutions to help increase your super balance.

  1. Check your superannuations balance and see if you are on track for a comfortable retirement. To live comfortably in retirement, couples need $62,828, whereas singles require $44,412. The average Australian woman retires with $45,000, or 31% less than men according to Australian Bureau of Statistics data.
  2. If you aren’t working, or work part time hours with an income of less than $37,000, if your spouse contributes $3000 to your super they can claim the maximum tax offset of $540.
  3. If your income is lower than $41,112, you can contribute $1000 to your super and the government will add an extra $500 each year.
  4. Take advantage of the Low Income Super Tax Offset, which is a government payment of up to $500 per year for low income earners.

She was concerned about the impact the lockdowns were having on women’s ability to save for their retirement.

“In short the financial progress of Australian women has been on very shaky ground during the pandemic and existing inequalities are being exacerbated. This will continue the longer COVID impacts our ability to work.”

Immediate steps you can take are to use the ATO’s Your Future Your Super tool, which lets you know how your super fund compares with other funds. I used this tool and switched super funds to one that offers higher returns. I am also making additional contributions.

It cannot be stressed enough that little contributions add up and can mean a much more comfortable retirement. Just be aware that you may pay administration fees on additional contributions.

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