How building financial confidence could close the super gender gap

With only 25% of women currently using a financial adviser and many lacking financial confidence, they are losing thousands in superannuation.

According to UniSuper manager of select advice, Renae Anderson, women cared about their finances but often needed greater confidence to make financial changes. 

“The gender pay gap, while shrinking, is not going away any time soon,” she said. 

Over 50% of women said they worried about their financial situation more than once a week. In particular, research from Australian Seniors noted that 44% of women aged over 50 had strong concerns about the rising cost of living, compared to 35% of men over 50. 

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Anderson added: “This is costing women hundreds of thousands of dollars in their super”.

Moreover, the Australian Tax Office (ATO) identified that the biggest financial gap between men and women sat in their super accounts. 

By 2030, men were projected to hold $432,000 in super at retirement on average, whereas women in the same position would have a balance of just $262,000. 

Data released by the Australian Prudential Regulation Authority (APRA) paralleled the ATO’s findings. The regulator found that those aged 55-59 years old exhibited the largest difference in super balances, with a gap of $44,400 (or 30%) between men and women.

The UniSuper manager recognised building financial confidence as a way to improve women’s super balances, and provided key recommendations.

Get advice 

“Advisors are trained to help you understand your finances, and they’ll walk you through the process every step of the way,” said Anderson. 

Research conducted by Fidelity International revealed that advised women were five times more likely than unadvised women to rate their knowledge of financial matters as very good.

Be involved with your finances

“By knowing your financial goals for retirement, and being aware of your current balance and fees, you can be proactive in making contributions or switching investment streams.”

Spousal contributions

Anderson recommended engaging in conversations with one’s spouse about contributing to their super. 

“Generally, for women earning less than $37,000 per year, their spouse can contribute $3,000 each year to their super and receive a $540 rebate on tax,” she noted.

‘Catch-up contributions’

Workers with a total super balance under $500,000 who hadn’t used up their concessional contribution cap of up to $27,500 in previous years were encouraged to take advantage of it. 

“This could have a significant impact on a woman’s super balance and anyone with a tax rate higher than 15% could save a considerable amount of tax.”

Check your fees

Reassessing one’s super fees and moving to a low-fee fund could save women thousands by the time they retire.

Anderson suggested the ATO’s MySuper comparison website as a tool for those looking to compare funds. 

Contribute your pay rise

“It's a little bit of extra cash you’re already used to not having in your bank, so take advantage of tax concessions on super contributions,” she continued. 

Go beyond the standard 10.5% contribution

By adding a small contribution each month to one’s super balance, women could significantly improve their retirement incomes in the long-term.