Women are more concerned about most aspects of retirement than men with many of these fears driven lower levels of financial literacy and engagement with superannuation, according to new findings from research conducted by AMP.
The financial services firms’ “Retirement Confidence Pulse” survey found 41 per cent of women are financially confident about retirement while 59 per cent of men expressed this sentiment. Further when asked about specific areas of concern the unease of women about their future financial prospects was much higher.
Specifically, AMP found 73 per cent of women are worried about having enough super for retirement, compared to 56 per cent of men and 71 per cent of women feel they won’t be able to afford their chosen retirement lifestyle in contrast to 53 per cent of men who indicated this was the case.
Additionally, 51 per cent of women limit their daily spending over fears of running out of money in retirement, with 42 per cent of men adopting the same practice.
“While lower super balances, driven by pay gaps and time out of the workforce, clearly impact confidence, the research also points to lower knowledge and engagement among women,” AMP stated.
“Only 34 per cent of women understand or understood the concept of compounding returns before age 40, compared to 61 per cent of men, and 55 per cent of women are confident in Australia’s superannuation system, compared to 71 per cent of men.”
The survey also found 26 per cent of women, as opposed to 34 per cent of men, have sought financial advice for retirement, and 30 per cent of which super fund they are a member or don’t engage with their provider with to 23 per cent of men belonging to this cohort.
AMP noted the survey findings are consistent with a report by its deputy chief economist Diana Mousina which found the gender gap in financial literacy in Australia is larger than that of the US, Germany, and the UK, and there was a statistically significant relationship between financial knowledge and retirement savings.
“The retirement confidence gap we’re seeing among women is the predictable result of a long-running financial literacy gap,” Mousina said.
“More than one in three Australian adults are financially illiterate and, worryingly, women consistently score lower than men with Australia’s gender literacy gap larger than in many comparable countries.
“That lack of knowledge is clearly contributing to a lack financial confidence in the future.
“The encouraging part is that literacy is fixable through better education in schools, workplace programs and the support super funds can provide.
“Every time we help a woman understand concepts like compound interest, risk and diversification, we’re giving her the tools to build wealth, independence and real confidence.”
