Supporting women to grow their super
Helpful ways you can become more confident and informed about your super.
Everyone deserves financial security in retirement
The Gender pay gap between men and women is currently around 13%1 while the super gap is around 42%2. Women in Australia are currently retiring with almost half as much as men, despite their longer life expectancy.
What causes the super pay gap?
There is not a single cause of the super gap, there are many contributing factors. Some key contributing factors include:
- The wage gap
Women in Australia working full time earn around 14%1 less than men.
- The caregiving burden
Women are more likely to be primary carers. Females account for more than 70% of primary caregiving3, on average, taking five years1 out the workforce act as a carer.
- 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.
Historical and ongoing discrimination and bias in hiring, pay decisions, promotions, and the undervaluation of 'female' jobs/dominated industries.1
- Tax advantages
Males are eligible for a disproportionate number of tax concessions within super. Women receive 1/3 of government tax concessions on super, with men receive the other 2/3.1
- 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.
1. Source: Workplace Gender and Equality Agency; Australian Bureau of Statistics (2020)
2. Source: The Association of Superannuation Funds of Australia Limited (2017)
3 Source: Deloitte; Australian Bureau of Statistics (2020)
For more information about what drives the gender pay gap, visit the Government Workplace Gender Equality Agency website.
A look back at superannuation
Super was uncommon in Australia until the mid-1980s when it began to be included in industrial awards. At that time, less than 40% of the working population had super, and only 24% of working women had super.
In 1986 super was introduced to all employees who worked under government awards, but it wasn't until 1992 that compulsory super for all was introduced.
It wasn’t until 1992 that all employers were obliged to pay all female employees super.
The introduction of legislation making super compulsory for all employees overcame many inherent design flaws that locked women out of retirement savings
There’s a history of direct and indirect discrimination against women in relation to retirement savings, and this discrimination has exposed women to financial insecurity.
Looking back generationally to the Silent Generation, Baby Boomers, Gen X & Millenials; it’s not until Gen X & Millenial generations that women have been paid super for their entire career. For women reaching retirement age now, many are reaching retirement age without super savings.
Percentage of the female population with super savings on retirement
Through mandatory super and through policies promoting equality, in combination with evolving attitudes and fairer social structures - we can have huge and positive effects on women's retirement outcomes.
Sources: Chronology of superannuation and retirement income in Australia (2010) https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/0910/ChronSuperannuation
Economic security for women in retirement https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Economic_security_for_women_in_retirement/Report/c02
Why is the super gap so much bigger than the wage gap?
\Compound interest makes super a powerful tool when saving up for life in 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 (36 years ago – when super became available under Government awards ix) with compounding interest, this deposit would be worth $115,836 today.
If you were to deposit $20,000 in 1992 (when super became compulsory for all), my $20,000 would be worth $82,323.
For the same principal amount of $20,000, an additional 7 years of investment leads to a 40% difference.
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.
How can we close the gap?
Contributing sooner rather than later
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, visit legalsuper.com.au/growing-your-super.
Other levers to pull
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 able to meet with you 1-to-1 and offer tailored support.
legalsuper has a significant role to play in closing the super gap. Historically, legislation and policymaking 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:
- superannuation and paid parental leave;
- workplace gender equality; and
- women on superannuation 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.
In addition, we have our own internal diversity policy to help us combat bias against women.
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 which follow us can achieve the same.
Create a better tomorrow
Making time to invest in yourself could be the most rewarding and empowering decision you make. Below are some helpful ways you can become more confident and informed about your super.
- Get online. Regularly check how your super is tracking with online access to your account
- Dedicate time. Check what you need and if you’re on track for a comfortable retirement
- 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.
Online tools to plan for the future
Explore options to grow your super
Our growing your super hub can help you understand ways to top up your super including:
- spouse contributions if you have a spouse who can contribute to your super for you
- government co-contributions if you are an eligible low income or part time worker
Our when life changes hub provides information and general advice about super related topics on:
- career breaks
- marriage & family
Enquiring Minds content hub
We’re more than just a high performing industry fund, we know and care about the issues that are important to our members. Our Enquiring Minds content hub takes on the big topics in law including stories and tips for all stages of work, life and financial wellbeing in the law.
Prefer to speak to someone?
As a legalsuper member, you have complimentary access to a dedicated Client Service Manager in your region, that you can speak with in person or over the phone. 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
To arrange an appointment with a Client Service Manager near you, contact us on 1800 060 312 between 8.00am and 8.00pm Monday to Friday AEST.