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How to solve the gender superannuation gap

Alex Ritchie avatar
Alex Ritchie
- 8 min read
How to solve the gender superannuation gap

The gender superannuation gap means that millions of Australian working women may retire with significantly less in their nest egg than men. So, how can we strive to solve this gap once and for all?  

While you may be aware of the gender pay gap, a less discussed facet of this economic theory is how it impacts our superannuation balances as well; also known as the gender superannuation gap. 

The gender superannuation gap refers to the fact that superannuation balances of men and women at retirement are vastly different. Men, on average, retire with far greater superannuation balances than women.

There are a series of factors that contribute to this, and combating these may require a mix of structural changes, employer changes and individual actions. 

How big is the gap between super balances for men and women?

According to the Australian Human Rights Commission (AHRC), many women are currently living their final years of poverty due to having significantly less money saved for retirement. 

The AHRC reports that half of all women aged 45 to 59 have $8,000 or less in their superannuation funds, compared to $31,000 for men. Additionally, the average superannuation payout for women is a third of the payout for men - $37,000 compared with $110, 000.

Data from the Association of Superannuation Funds of Australia (ASFA) shows that between the ages of 55-59, women have an average super account balance of $123,642, whereas men have a balance of $237,022. Between the ages of 60-64 women have an average super account balance of $157,049, whereas men have a balance of $270,710. 

Gender superannuation gap

Age

Gender

Superannuation balance

Difference

25-29

Male


Female

$23,712


$19,107

$4,605

30-34

Male


Female

$43,583


$33,748

$9,835

35-39

Male


Female

$64,590


$48,874

$15,716

40-44

Male


Female

$99,959


$61,922

$38,037

45-49

Male


Female

$145,076


$87,543

$57,533

50-54

Male


Female

$172,126


$99,520

$72,606

55-59

Male


Female

$237,022


$123,642

$113,380 

60-64

Male


Female

$270,710


$157,049

$113,661

Source: ASFA Research and Resource Centre: Superannuation account balances by age and gender, October 2017.

What causes the gender superannuation gap?

There is no one cause to the gender superannuation gap, as it is the outcome of a series of factors that contribute to ongoing disparity between the income and super balances of men and women. Some of these causes may include:

The gender pay gap

Women earn less over their lifetime than men due to the gender pay gap, and therefore have less pre-tax income to utilise for superannuation contributions. 

The gender pay gap is an economic theory that seeks to define why women may earn less over their lifetime than men. It is not the notion that every working man is simply paid more for being a man, but touches on complex factors, as outlined by the Workplace Gender Equality Agency:

  • “Conscious and unconscious discrimination and bias in hiring and pay decisions. 
  • Women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages.
  • Lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles.
  • High rates of part-time work for women.
  • Women’s greater time out of the workforce for caring responsibilities impacting career progression and opportunities.
  • Women’s disproportionate share of unpaid caring and domestic work”.

Australia’s national gender pay gap currently sits at 13.3%, having recently dropped in February 2023. Put simply, women currently earn, on average, 87 cents for every $1 earned by a man. This factor alone is one of the most significant contributors to the disparity between male and female superannuation balances. 

Caretaker burden

Speaking of time out of the workforce, women are the predominant providers of informal care for family members worldwide - not just children. Particularly for those with chronic medical conditions or disabilities, including the elderly and adults with mental illnesses. 

Because of this, women are more likely to either work part-time, or take greater career breaks than men, to take care of family members. This results in women earning a lower income to their male counterparts who did not need to take these breaks, and therefore contribute less to their superannuation. 

Life expectancy

An interesting factor to also consider is that women, on average, live longer than men. This means that they may need to rely on a greater nest egg of superannuation to sustain them over a longer period of time than men. 

So, not only are women accruing less superannuation over their working lives, the balances they are able to save may not go far enough in allowing them a comfortable or even modest lifestyle. 

How do we solve the gender superannuation gap?

Closing the gender pay gap on a company level

As the gender pay gap is one of the biggest contributing factors to differences in male and female superannuation balances, closing this gap is one of the first steps businesses must take internally. 

As the Workplace Gender Equality Agency states, closing the gender pay gap requires “cultural change to remove the barriers to the full and equal participation of women in the workforce”. Companies are encouraged to consider the following steps:

  • “Conducting an audit to understand the size of the gender pay gap
  • Reporting the findings to management and employees
  • Setting KPIs for leadership to reduce the gender pay gap
  • Taking action to increase the number of women in leadership positions
  • Encouraging men to access flexible work arrangements and leave entitlements.

Helping women to negotiate their salaries

Research from the Workplace Gender Equality Agency into ‘Gender and Negotiation in the Workplace’ shows that women are less likely than men to negotiate their salaries, and of those that do, women typically have smaller wage increases than men. This can result in lower earnings for women overall, and therefore lower superannuation balances.  

Of those surveyed, 51.3% men and 35.8% women were reported to have negotiated their pay. A further 19.2% of men surveyed reported that they had successfully negotiated their salary while only 12.7% of women indicated the same. 

To help combat this, it may be worthwhile for companies or government agencies to provide training and support to women to help them negotiate their salaries.

Encouraging paternity leave

To help reduce the caretaker burden that women typically face after giving birth, companies may want to not only increase the available number of paid parental leave days, but also encourage male workers to take this leave.  

Many men still do not feel comfortable taking full paid parental leave, with research showing that most cite fears of “being discriminated against professionally, missing out on pay rises and promotions, being marginalised or even mocked as reasons for not taking time off.”  

These concerns may be due to ingrained stereotypes around gender, and changing these will require cultural shifts within companies to better encourage men to take full parental leave. 

The good news is that new paid parental laws have just passed that combine the two existing parental leave payments into a shared 20-week scheme, with an aim to grow to 26 weeks by 2026. This was driven forward with an aim to make it easier for fathers to take paid leave. 

Providing flexible work arrangements

Another way that we may be able to help close the gender superannuation gap is to provide more flexible working arrangements, like remote work, so women can better balance these caretaker responsibilities while maintaining their part- or full-time workloads. 

The COVID-19 pandemic helped to illuminate the benefits of working from home, and hybrid working environments. For businesses that rushed to bring employees back into the office full-time, it may be worth considering allowing for flexibility for employees doing the majority of caretaker work in their homes - whether for children or sick and elderly family members. 

This may allow women in particular to not need to take time out of the workforce or switch to casual or part-time working. By maintaining a full working week, women may be able to keep their same income levels and continue to boost their superannuation. 

Increasing your superannuation contributions

On an individual level, women may want to consider making regular, voluntary contributions to their superannuation while they are earning income from employment. Not only may this help to boost your superannuation balance before you need to take time off for children or caring for family members, but there are tax benefits to making voluntary super contributions out of your pre-tax income.  

Additionally you could consider splitting superannuation contributions with your partner. If one household member has a child, their partner may be able to make voluntary contributions into the birth-giving member’s superannuation account so that they do not fall behind while on parental leave. 

Pre-tax superannuation contributions can be split, so if your spouse is working, they can pay you some of their super during the year. Your spouse may also make a post-tax contribution to your super account to help reduce the gender superannuation gap. 

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Product database updated 15 Jun, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.