In Australia, superannuation plays a crucial role in securing financial stability for individuals in retirement. Australia continues to have a gender super gap, and the gender pay gap contributes to this.
Nursing and midwifery are female dominated professions and women face unique challenges that can place them at a disadvantage when it comes to retirement savings. While retirement may seem a long way into your future, understanding the importance of superannuation is essential for achieving gender equality, and ensuring a dignified and secure retirement.
According to the Australian Bureau of Statistics, in May 2024, the gender pay gap averaged 11.5%, meaning for every dollar earned by a man, a women earned 89 cents. This gap varies according to state and territory and ranges from 5% in Tasmania to 19.4% in Western Australia and is influenced by the types of industries and work available.1This gap subsequently influences women’s superannuation contributions, because they are calculated as a percentage of income and in 2023, the Association of Superannuation Funds of Australia, found the average superannuation balance for women at retirement was 23.4% lower than men. Several other factors contribute to this disparity. Many women take time off work to care for children or elderly relatives, significantly reducing superannuation contributions. As a result, women can find themselves in difficult financial positions as they retire. Additionally, women returning to the workforce and seeking flexibility for caring responsibilities, may opt for lower-paying or part time work, further contributing to the superannuation gap.2
Another significant issue is created when women access superannuation early, making lump sum withdrawals and reducing funds available for retirement. During the COVID 19 pandemic, 725,000 Australians wiped out their superannuation accounts with 70% being 30 and under. The Super Members Council (SMC) is a peak body established in 2023 by the profit to member superannuation organisations. The SMC advocate for super fund members to ensure superannuation policy is stable, effective and equitable. SMCs analysis of early access to super found that a 30-year-old who withdrew $20,000 from super, could be left with about $93,600 less at retirement.
Purchasing a house is increasingly difficult and suggestions have been made from the conservative side of politics that people should be able to access their superannuation early to assist with house purchase. Modelling by the SMC suggests withdrawing super for this purpose will increase house prices by approximately $75,000 across capital cities, adding to unaffordability. This has been seen in New Zealand, where people could withdraw super for housing. Not only did house prices surge but home ownership fell and cost people retirement savings. SMC modelling shows a 30-year-old couple who withdrew $35,000 each from their super today could retire with about $195,000 less.
CARING FOR YOUR SUPER
Superannuation is a worker right in Australia and one to be protected to ensure it protects us as we age.
One of the best things people can do is learn about their superannuation, even though retirement might seem a long way off. Most super funds offer free, general advice to members and their websites contain useful information. The SMC website has free and accessible information to help people learn about superannuation and how to protect it.
More broadly there are measures that must be reformed to address structural drivers of the gender super gap, for example the social norms related to unpaid carer responsibilities, lower workforce participation rates for women and the situation where highly feminised industries and jobs continue to attract lower wages and therefore lower superannuation contributions. Thankfully, the Federal Government has announced that they will pay 12% superannuation to workers taking Commonwealth Paid Parental Leave (PPL) from 1 July 2025. Of those accessing PPL 99.5% are women. While more action is needed to address the gender super and pay gap, this is a great start.
Engaging with your super is likely to result in better outcomes in retirement. When was the last time you checked your super balance?
This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this.
References
1 The ABS Data Gender Pay Gap.” Australian Government, 2024, accessed wgea.gov.au/data-statistics/ ABS-gender-pay-gap-data
2 SMC. Securing a Dignified Retirement for More Women. SMC, 2023. smcaustralia.com/ app/uploads/2024/05/2023-12- 08-SMC-REPORT-Securing-a-dignified-retirement-for-more
