The latest report into the experience of women in retirement has confirmed a gender gap in the retirement savings of Australians continues to exist and has identified factors exacerbating the issue that have previously not been discussed.
Historically the superannuation gender gap has been attributed to the inequalities in women’s workforce participation and pay especially when the need to care for children is present.
However, new research released by Impact Economics and Policy conducted for the Super Members Council has found many events affecting women later in life are significantly contributing to this ongoing issue.
Specifically the study identified separation, unpaid caregiving for older relatives, and family violence are experiences that are likely to force women into part-time work or early retirement in turn diminishing their ability to save for their retirement. It is suggested these circumstances could lead to women having $95,000 less in their superannuation savings.
The analysis also found the number of older women living in a rented abode is increasing with close to 60 per cent of older female renters already living below the poverty line.
Despite this statistic the report indicated a government policy that would allow women to withdraw their super monies early for house deposits would make females significantly poorer in retirement with less income to live on.
Instead the research recommended other courses of action the government could take to improve this ongoing situation such as unfreezing the Low-Income Super Tax Offset to help low-income women to build their super, closing gendered loopholes in super coverage including through payday super reforms, and including nannies, housekeepers and carers, and workers under the age of 18 in the super system, and removing barriers to women’s workforce participation by boosting access to childcare and aged care and strengthen workplace flexibility.
Further it called for Canberra to enable fairer splitting of super in divorce settlements whether or not they are handled in a court, and making the super and age pension systems simpler and easier to navigate.
According to Super Members Council chief executive Misha Schubert the report represents a wakeup call for retirement savings policymakers.
“Australia has made important strides in recent years on the gaps in pay, super and workforce participation, but this research shines a spotlight on the need for further bold reforms to ensure our retirement system truly works for women – especially low-income women,” Schubert said.
“Without urgent action, generations of Australia’s lowest-paid women risk poverty in retirement,” she added.
“Recent reforms are an important start, but an even bigger and bolder approach is needed.”
