The average woman is retiring with 34 per cent less in superannuation than the average man despite a tightening of the gap compared with previous years, a report finds.
Financy’s Women’s Index end of year report noted that the 34 per cent gap in 2018 is lower than the gap in the financial year to 2014, when it stood at 38 per cent, and in 2012, when it was 39 per cent.
“This is likely to have been influenced by improved long-term returns, higher wages and employment growth among women, but also we are seeing an increasing number of organisations starting to offer tailored superannuation benefits for women and those on paid and unpaid parental leave,” the report said.
“Such measures are likely to be effective in helping to retain women in the workforce and supporting their transition back to work after children.”
However, the report found that the gender gap is much worse the older a woman gets. It found that, based on the latest 2016 data, the average superannuation balance for people approaching retirement age (55-64 years) was $196,400 for women and $310,100 for men.
This means that for the for the average woman nearing retirement today, she is likely to have 37 per cent less in superannuation savings compared with the average man of her age, the report said.
One suggestion noted in the report to improve the gap was introduced in July 2018; allowing unused concessional super contributions to be accumulated over five years, provided the individual’s total super balance is less than $500,000.
While the annual limit on concessional contributions is $25,000, the measure allows individuals to make use of up to five years of previously unused contributions.
“This measure could help women returning to the workforce after taking time off to have children, giving them the ability to 'catch-up' on super by making higher concessional contributions without breaching the annual cap,” said AMP Financial Planning adviser Dianne Charman.
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