Supporting women to grow their super

Women in Australia are currently retiring with less super than men, despite their longer life expectancy.

A woman smiling at a computer

What causes the super pay gap?

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.

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?

Compounding interest means the longer your money is invested – the more interest you make. Boosting your super, or your spouse’s super is a way to help close the super gap.

For information about salary sacrifice, voluntary contributions, spouse contributions and contribution splitting, click here.

Working towards financial security for you and your family isn’t just about putting away money. There are other levers you can pull to optimise your super.

Understanding fees, account consolidation, making an investment choice, sorting your insurances and managing your beneficiaries, are some options.

legalsuper is focused on empowering our members through education, enabling both women and men to better leverage super and have confidence in financial security.

To make the most of contributions and optimise your super account, legalsuper is here to help. We have a national client service team to meet with you 1-to-1 and offer tailored support.

As a legalsuper member, you have access to a dedicated Client Service Manager in your region, that you can speak with in person, over the phone or online. A Client Service Manager can help with: 

  • maximising your super savings 
  • finding lost super and consolidating other super accounts 
  • your insurance options 
  • retirement planning strategies 

Click here to arrange an appointment with a Client Service Manager near you, or contact us on 1800 060 312 between 8am and 8pm Monday to Friday (AEST/AEDT).

A woman sitting at a table with a book

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.

Case study

Together with the favourable 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.

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 favourable 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.