Women still have a crushing super gap

Women are still lagging behind men on super, and the gender pay gap isn’t helping, writes Gayle Bryant.

• Recent research shows the gender wage gap is alive and well.
• Men retire with almost double the super of women.
• Women continue to undertake most of the domestic and childcare duties.

The gender pay gap is alive and well – a situation which, unless addressed, will continue to negatively affect women’s superannuation balances.

Despite more women entering full-time work, the average weekly earnings of full-time employees between 2001 and 2016 increased 23 per cent for males but only 22 per cent for females.

These figures are from the 2018 Household, Income and Labour Dynamics in Australia (HILDA) survey, which also found that, since more women than men now hold university degrees, higher education doesn’t appear to be a driver in closing the gender pay gap. In 2016, 35.7 per cent of women held degrees compared with 31.1 per cent of men.

Run by the Melbourne Institute, the HILDA survey collates data from the same 17,000 Australians each year. Its latest figures on the gender gap in full-time average earnings (taken from the 2017 report) found that in
2014–15, women’s weekly earnings rose 3.6 per cent from $1284 to $1330, while men’s fell by 1 per cent from $1691 to $1673.

Women still lagging on super

A large divide persists between men and women at retirement, with men leaving the workforce with almost double the superannuation of women.

In July 2023 the Association of Superannuation Funds in Australia (ASFA) found that the median super balance for women is around 25% lower than for men leading up to retirement and urged for action to close the retirement savings gender gap.

HILDA report co-author Roger Wilkins says the disparity between super balances at retirement is largely due to many women leaving the workforce to have children just as their earnings are growing most strongly.

“Women are also more likely to return to work part time after having children,” he says. “Because they work fewer hours, this lowers their future earnings growth as they’re getting less work experience and fewer promotions. I don’t think that gap will ever close.”

ASFA found that in 2015–16, men held 61.2 per cent of total super account balances compared with around 
38.7 per cent for women. This is unsurprising given men’s higher incidence of super and their higher average account balances.

While the disparity is substantial, women’s share of the super balance had increased by two percentage points compared to two years earlier, and there has been a strong improvement since 1994 when women’s share was around 23 per cent.

Women are retiring later

Australians are also working longer and retiring later. Between 2012 and 2015, the average age of retirement for men rose by four years from a decade earlier to 66.1 years; for women it was up to 63.8 years.

In 2001, 49 per cent of men and 68 per cent of women aged 60 to 64 were retired, while in 2015 only 28 per cent of men and 48 per cent of women in this age range were.

Among women aged 55 to 59, the proportion who were retired fell from 45 per cent in 2001 to 23 per cent in 2015. However, Wilkins says this trend to work longer appears to be driven by workers themselves.

“There has been a shift away from people reporting they retired due to poor health or job loss, or from an employer pressuring them to retire,” he says. “Those reasons have been declining, and more and more they are reporting retiring because they want to or are financially ready for retirement.”

Childcare costs still increasing

Meanwhile, the HILDA survey also showed that childcare costs are continuing to take a bigger chunk out of people’s pay, rising in real terms by 74 per cent for couples and 104 per cent for single parents between 2002 and 2015.

In 2002, median weekly expenditure on childcare was $93 for couple families and $56 for single-parent families. By 2015 this had risen to $162 for couples and $114 for single parents, putting greater pressure on household finances.

Women clean up on domestic duties

The HILDA survey also showed that men are yet to take up the slack when it comes to housework and childcare. Women carry out 13 hours more unpaid work each week than men, who have only increased their housework by one hour a week from 2002 levels. Women report that they feel overburdened by household chores.

“Despite much public discussion about improving the lot of women in Australia, on many measures there has been relatively little progress this century,” Wilkins says.

In 2002, the average woman spent more time each week on housework than on employment (22.8 hours versus 21.5 hours). This pattern was reversed in 2016, when working-aged women averaged 24.9 hours on employment and 20.4 hours on housework.

However, compared to men, women still spend more time on housework (20.4 hours compared with men’s 13.3 hours) and childcare (11.3 hours compared with men’s 5.4 hours).

Steps to help bridge the super gap

• Multiple super accounts? Research which one is best for you and roll all your super into it.
• Make extra contributions to boost your super. (This ASIC MoneySmart calculator can help you work out how much).
• Planning a baby? A good time to get your finances in order is before going on parental leave, but you can do it anytime.