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Women are saving Less Superannuation – Still a Problem

Superannuation allows an individual to accumulate long-term savings for over a long career. Superannuation works if the individual has good pay with no career break or the worker remains fully employed over their working lives.

Unfortunately, superannuation doesn't cater for women because they face the challenges of gender-pay inequality. Women take career breaks when they have children and nearly half of all women engage in part on part-time employment rather than part-time work.

Current trends suggest that women on average will accumulate superannuation account balances which are approximately thirty to seventy percent lower than the average Australian worker. Variation is dependent on the woman's circumstances.

For example, after a career break, women return to full-time work or part-time work. Some women return to their old jobs, or others seek alternative employment opportunities that may result in lower wages.

For years I have thought that aside from the good aspects of super, one of the major errors with the Australian superannuation system lies within the mainstream of the compulsory super system itself. For the present super system to have the greatest odds of working well, you need to have the following characteristics:

Unfortunately, I think the list above still recaps the way many political parties are dealing with the super policy: this is a world that obviously does not exist for numerous Australians, particularly for women.

If the list does not reflect your circumstances, then the super system will not likely meet your necessities, unless you take an active and a strong interest in your savings. However, considering this approach needs more effort, but I do think that you can still create a financially secure retirement, regardless of the obstacles.

For the previously stated reasons, the major beneficiaries of the system are older, richer men, but that isn't due to them rotting the super system.

Grattan Institute suggests that altering the superannuation tax system will not prevent older, richer men from making the most of the super system, even if Grattan Institute thinks it will. Super is a catalyst that is concessionally taxed, and older, richer men earn money more, thus pay extra tax, and get an extra tax benefit from the system.

The real problem here is why older men are earning more money than older women, as well as why policies haven't been made to accommodate this huge difference between genders when it comes to income levels.

Any person living in Australia whose personal circumstances do not reflect the list mentioned above will still need to overcome social and structural obstacles for retirement savings.

So, how should the super decision-makers set up the retirement policy, if they're depending on a view that shows a working life existing for a decreasing number of citizens, and for only a few women? The answer is easy – acknowledge that women and men have different working careers averagely, and adapt super policies accordingly. And difficult can this be?

Would it not be excellent if the main political parties thought about a bipartisan solution to the flaws of the super system, or maybe the solution ought not to be handled by the politician, yet rather the women who have just retired and can share along with us, what has to change to make women's future retirement a more relaxed experience.

Women live longer but earn less

In 2010, an article entitled “My top 10 super wish list for Australian consumers" discusses a better superannuation system for women.

At that moment the author believes that most of the time, the superannuation system aids numerous people to save for a suitable retirement, unless you are a woman with kids who spend long periods of absences, or you are a divorced, older woman rearing children. Furthermore, the article states that:

Although we may all like to think women and men are the same, regarding money and finance, women have different life experiences to men such as:

The large gap in our superannuation system that keeps on overlooking the life and work patterns of most women is due to slack economic and social policy from previous governments.

Note that the reasons that cause the low superannuation payouts for women can be dated back to super policies and discriminatory work over the past five decades. The workplace was not kind to women during the 50's and 60's.

Only workers working full-time, and mostly male workers, were provided entry to superannuation. Working women were usually single or divorced, but women were provided with only half the money that males were paid for the same job until the government changed the laws in 1975.

But even today, as stated by numerous studies, women are still paid less than males in the same job, though the gap is currently closing.

Now, family duties, including caring for the elders and rearing children, still mainly fall on the shoulders of women. If working, women are more likely to work part-time instead of work full-time although the participation of women in the workforce is boosting.

Super policies mirror the culture of the current time. The major super issue for women is still extended periods of time off work since nearly all super policies are related to work.
Certainly, mostly men are profiting from these policies, but this isn't a tax issue as what most business groups think. The fact that most men are benefiting from the policy is a social, structural, and economic matter.

Instead of handling these basic issues, it seems that the government and loads of these business groups are an agenda, without regard for the retirement needs of women.

The super system does not work for women

If you are already retired, I am certain that you know how it feels during a cold night and you relax, sitting comfortably on the couch, watching a great movie. It is one of the many simple pleasures of life.

However, don't rejoice yet, this pleasure is denied to thousands of retired women in Australia because our superannuation system is failing them. For renters, the age pension is hardly enough. Also, compulsory super is not working for numerous women at all.

These women are essentially forced to retire even though they still cannot afford it. This is merely one of the numerous difficulties they encounter. They usually cannot afford Holiday presents for their grandchildren.

Some cannot even keep their pets, frequently their only companion while others switch off the hot water during winter just to save on utility bills.

In a huge research partnership, Per Capita along with Australian Services Union surveyed over 4.500 employees on their retirement plans and associated this with statistical data to build, and the results are not pretty.

Women have less superannuation than men at every phase of their working careers. And by the end of this, the median super balance of women is only 50% that of their male counterparts: around $80,000 versus $150,000. Approximately 25% of men hold over $500,000 of super balances while just 4% of women do. 

On the contrary, almost 25% of women have less than $50,000 of super balance, and this nest egg expected to last for more than 30 years, given the increasing longevity. Particularly, mothers fare poorly, which hold balances that are constantly lower that fathers or adults without kids.

Women are also not performing so well in the system's third pillar: private savings. Nearly 50% of women asked hold no private savings beyond the family home, and outside of super, and for those who did, the biggest group only had below $10,000.

It is difficult to see the reason so many women show anxiety and worry about their future visions after they retire. Attempting to stretch a balance of below $100,000 over thirty years will not provide you with much of a security over the pension; that is despite the many years of having a decent, middle-class job. 

So how has this inequality come to this? Numerous interconnecting factors play a part, and these combine with each other to worsen the problem.

Initially, there is the underlying gender wage gap, where women are paid less than men for the same work, and more likely to accept casual jobs, which means that they have fewer hours and less security. Since superannuation contributions are a direct pay function, this instantly suppresses their savings.

Moreover, women suffer because they endure the load of unpaid care. Over 55% of women asked had taken time off work to care for the older relative and young children. Women do not only make extended periods out of work, but they are also off work way longer than most do.

Nearly 45% of men take time off work for less than three months. On the contrary, more than 50% of women are out of work for over six years. Thus, this has resulted in a dramatic effect on the ability of women to contribute to superannuation.

Together with these causes are numerous others including a breakdown of the relationship, the super's regressive tax treatment, the poor availability and high cost of childcare, as well as the frequency and difficulty of change to the superannuation system itself. It's a vile dilemma.

Essentially though, our super system was intended for a domain of work that is fast dying: a male breadwinner working in a secure, full-time job while building up retirement funds for himself and his family. It was never designed to work for working women. If it did not work then, it does not today.

So what needs to be done? Fixing this problem requires numerous solutions. Everybody is the superannuation system – the government, super funds, employers, individuals, and unions – will need to play a part.

The crucial element here is that throughout their working careers, people do not fall way below the decent accumulation pathway. It is the trajectory of savings towards a superannuation balance at age 65 that will leave retirees with a decent quality of life and standard of living until age 90 at least.

We estimate this super balance to be approximately $350,000, providing individuals with a $38,500 income when combined with age pension.

An indicative super accumulation pathway

To get this, we suggest that the government tops up SG contributions for employees who fall over 5% below this accumulation pathway, and pays superannuation on its carers' payment schemes and paid parental leave. We call on unions and employers to include contributions on carers' and parental leave schemes in agreements.

Super funds could provide free discounts to account holders that belong below the pathway, as well as fee-free periods for individuals on carer or parental leave.

The super system of Australia is a $2 trillion organization that will remain vital to our retirement income system for many years to come. But during times when the risks of rising inequality are gradually recognized, the system is establishing unequal results for women who have played continuously fair, working and saving for retirement just as they had been requested. It is now time to do better.

Wages gap results in retirement savings gap

A primary feature of the super system is the compulsory employer contributions or the superannuation guarantee aka SG. The employers are obliged to pay an extra 9.55 of a worker's income to their super fund every quarter.

A consequence of super contributions being a wage percentage as well as a workforce that pays women averagely $17,243 less annually than men, is that the super entitlements of women will build up at a lower rate – 9.5 % of $17,243 is equal to $1,392 less paid to super annually. This huge difference compounds substantially over the long term.

Tom and Kate, both 30 years old, are full-time workers earning $90,000 $ and 73,000 respectively. Kate holds a $25,000 super balance while Tom has $30,000.

Their respective employers pay compulsory super contributions for them, and both Tom and Kate plan to work until they reach 65 years old. If they do not make any super contributions, upon retirement, Kate will accrue approximately $648,000 in super while Tom will get more than $795,000. That is a $147,000 difference.

The main issue in addressing such gap is correcting the wage gap. The government is now reviewing the efficiency of Equal Remuneration Orders created under the Fair Work legislation and is continuing to support and back the Workplace Gender Equality Agency (WGEA), in helping organizations develop plans and strategies to reduce the gender wage gap.


The Committee recommended various super-related measures that target to address the suitability of retirement savings of women. These include:

Final Words – Potential Solutions

This is a complex issue, and there are no clear solutions at the moment. But one potential solution is for super contributions to be continually paid into women's super account while she's taking time off to have children.

This superannuation top-up package can be part of the woman's superannuation package at work. The issue at the moment is that government or a public sector employer must bear this additional payment and there's no agreement on how this could be structured.

Currently, there are discussions on placing caps or limits on Australian superannuation contributions. These types of agreements of lowering superannuation contributions will severely disadvantage women who are returning to work after having children.

If they choose to, women should be able to make higher than normal contributions from their cool break or to catch up the same level of savings as non-workers.
For more information about women and superannuation, refer to: Beating the Super Gap

Disclaimer: All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.


Have you changed your name, address or job in recent times?

If so, Now is the time to find those multiple funds & consolidate your super!

Australian Super Finder specialise in searching for lost, inactive and active superannuation accounts.

Complete the form to find your money. complete the form

Free Super Search
Date Of Birth
Australian Super Finder is a business name of The Trustee of Saicare Trust ABN 44 772 398 737. The Trustee of Saicare Trust is an Authorised Representative of Financial Advisers Dealer Group Pty Ltd ABN 19 620 315 228 AFSL No. 501362, Authorised Representative Number 463275. All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.