Almost half of Aussie women do not feel in control of their finances

Almost half of Aussie women do not feel in control of their finances

MLC have released new research showing that just over half of Australian women feel in control of their finances, with the remaining half concerned about the lack of opportunities available for women to grow their super, as well as their savings. 

Of all the respondents in MLC’s all-female survey, only 57 per cent of women in Australia feel “in control” of their financial situation, and have “confidence they will be able to retire comfortably”. 

The staggering 43 per cent of Australian women who do not feel in control have attributed low savings (61 per cent) as the main reason why. 

Further, 32 per cent of respondents said they have “less than a month’s worth of savings to live off if they needed to”.

The gender superannuation gap is real

These troubling figures coincide with recent data from The Association of Superannuation Funds of Australia (ASFA), who found that “while the average super balances for women are increasing, they are still well behind that of men – and the gap is growing”. 

According to ASFA, the average balance of superannuation for Australians in 2015-2016 was $111,853 for men and $68,499 for women.

General Manager of MLC Advice, Jasia Fabig, believes that this research further emphasises that “while many women feel comfortable financially, more needs to be done to support them to make their future financial interests a priority.” 

“What we often see is that women put the interests of others before their own, and at key moments in life – divorce, death, illness, or job loss – they are severely impacted. 

“Only 34 per cent of the women MLC surveyed are putting extra money into their super, and we’d like to see this number grow. 

“Women and their money matter, and we want them to be able to weather financial storms,” said Ms Fabig. 

Other key findings include: 

  • Despite 57 per cent of women feeling in control of their financial situation overall, only 47 per cent of single women report feeling in control of their money
  • 81 per cent of women believe they will own their own home in retirement
  • 77 per cent of women think they’ll have less than 50k left on their mortgage when they retire
  • 66 per cent of women are not participating in voluntary super contributions 

MLC research also found that of the women who do not feel confident about saving for retirement, 74 per cent attribute the reason to the high cost of living in Australia, and 48 per cent put the blame on low super balances.

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Learn more about savings accounts

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.