Women and superannuation - how the pay gap can impact your super

3 min read

According to the Australian Bureau of Statistics, women are retiring with 37% less than men in their super accounts1, which is a frightening thought considering women, on average, live up to five years longer.2

So, what’s behind the super gap?

The super gap is partly due to the lower average earnings of women, data from the Workplace Gender Equality Agency, reports that the full time remuneration gender pay gap in Australia is 13.4% compared to males.3 While many have blamed the “wage gap” on gender, Harvard Business Review research suggests women ‘ask’ for pay rises as much as men do, however, they are far less likely to actually get them.

The study also suggests that while men are successful in negotiating a pay rise 20% of the time, women were only successful 15% of the time (despite both genders’ concern about damaging their relationships in the workplace).4

This in turn impacts retirement savings, as the less money you earn, the less superannuation you will receive because your Superannuation Guarantee contributions are based on your level of income.

The second reason for the super gap, is that women typically take time out of the workforce to raise children. The absence of ongoing superannuation contributions can have a significant impact on the final amount women can end up with in super.

What can be done to address the super gap?

One of the simplest way to catch up on lost super contributions, is to make additional contributions to super along the way. Small amounts over longer periods of time may be easier to commit to, for example, making additional contributions may be enough to narrow the gap caused by taking time out for the workforce.

If you are getting closer to retirement, you may consider maximising the amount you are contributing each year in concessional contributions up to the $27,500 limit (or higher if you have previous unused concessional cap amounts). Keep in mind, however that any contribution you do make to super will be preserved, and unable to be accessed until you meet a condition of release from super. Most commonly this would be reaching your preservation age and then retiring. In addition, it’s worth considering if you are in an appropriate super fund, which meets your needs, including the level of insurance cover you have and whether you may reduce this if you no longer need it. Consider the fee structure of the super fund and also pay attention to how your super is being invested, for example - if you have a long time until retirement, you may benefit from increasing your exposure to growth assets.

For women in relationships, a problem shared could help close the retirement gap. This is because your spouse can split up to 85% of their concessional contributions each year with you. Further, if you earn less than $40,000 per annum, your spouse may be eligible for a tax offset of up to $540 for a $3,000 contribution (made with after-tax money).5

Three tips to closing the super gap

  1. See how your salary compares with those doing a similar role and seek out regular reviews.
  2. You may wish to consider seeking advice or, outside of that, whether making additional contributions may help bridge any super gap.
  3. Take control of your super as soon as possible; little changes early can potentially make a big difference in the long-term.


[2] https://www.who.int/gho/mortality_burden_disease/life_tables/situation_trends_text/en/
[3] https://www.wgea.gov.au/data/fact-sheets/australias-gender-pay-gap-statistics
[4] https://hbr.org/2018/06/research-women-ask-for-raises-as-often-as-men-but-are-less-likely-to-get-them
[5] https://www.ato.gov.au/Individuals/myTax/2017/Tax-offsets/Superannuation-contributions-on-behalf-of-your-spouse/

Want to boost your super?

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Help grow your superannuation savings during your working life and make the most of your retirement through superannuation with BT.

This has been prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141. Information is current as at May 2019. This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs having regard to these factors before acting on it. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. Any tax considerations outlined in this article are general statements, based on an interpretation of the current tax law, and do not constitute tax advice. Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website. This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.