Supporting women to grow their super

Everyone deserves financial security in retirement 

The Gender pay gap between men and women is currently almost 23%¹ while the super gap is around 24%^2. Women in Australia are currently retiring with less super than men, despite their longer life expectancy.

What causes the super pay gap?

The super system is linked to paid work, due to a range of factors, women are often paid less and also make up the majority of part-time and casual workers. Some key contributing factors include:

• The wage gap
  In Australia, the gender pay gap is 22.8% - women on average, earn $26,596 less than men each year. For every $10 earned by a man, a woman on average, only earns $7.72.³
• Caregiving
  Women are more likely to be primary carers. Females account for more than 70% of primary caregiving, on average, taking five years out the workforce.⁴
• Part-time workers
  Women are more likely to work part-time or casually than men, contributed to by a lack of workplace flexibility to accommodate care responsibilities. This not only affects the amount women earn, but career and wage progression.
• Inequality
  Historical and ongoing discrimination and bias in hiring, pay decisions, promotions and the undervaluation of traditionally 'female' jobs/dominated industries.
• Tax advantages
  Males are eligible for a disproportionate number of tax concessions within super. Women receive one third of government tax concessions on super, while men receive the other two thirds.⁵
• Compound interest
  A lifetime of earning widens the gap and compounding interest deepens this divide further. Males are earning compound interest on their larger savings, which means more interest in the long term. Read more on this below.

How can you close the gap?

Why is the super gap so much bigger than the wage gap?

Compound interest makes super a powerful tool when saving for retirement as interest is paid on both the principal and interest from past years: a bit like the snowball effect – over time you see exponential growth.

Using MoneySmart’s compound interest calculator as an example:

• If you were to deposit $20,000 back in 1985 (when super became available under Government awards) with compounding interest, this deposit would be worth $133,191 today.
• If you were to deposit $20,000 in 1992 (when super became compulsory for all), your $20,000 would be worth $93,926.

Together with the favorable tax treatment afforded to super, compounding interest is one of the main reasons investing through your super for retirement is so powerful and one of the many reasons why the super gap is so much bigger than the wage gap.

Challenging the super gap

• legalsuper is here to empower all members to make choices leading to better outcomes in retirement. For women, we are working to close the super gap and increase the long-term financial security of our members, so that generations of women who follow us can achieve the same. 
• legalsuper has a significant role to play in closing the super gap. Historically, legislation and policy making has had the biggest impacts on women’s financial security in retirement.
• legalsuper works closely with organisations who help us influence better outcomes for women.
• legalsuper is a member of Women In Super, a not-for-profit organisation. Through Women In Super, we advocate for a super system void of gender-based inequality. This includes advocacy for topics such as super and paid parental leave, workplace gender equality and women on super fund boards.
• We also work with the Australian Council of Superannuation Investors (ACSI) which provides a collective voice and influence on Environmental, Social, and Governance (ESG) issues, including promoting gender diversity on the boards of ASX listed companies.
• We have our own internal diversity policy to help us combat bias against women.

Check your super to create a better tomorrow

Making time to invest in yourself could be the most rewarding and empowering decision you make. Here are some helpful ways you can become more confident and informed about your super. 

1. Get online. Regularly check how your super is tracking with online access to your account.
2. Dedicate time. Check what you need and if you’re on track for a comfortable retirement.
3. Be prepared. Life can be full of unexpected surprises. Check you have the right amount of insurance cover for you and your family.

The sooner you get started, the sooner you’ll feel more in control.

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