Call to action this International Women’s Day
As we mark International Women’s Day – March 8 – it’s time to shine a light on a critical issue that often escapes the headlines – the retirement savings
gap.
It’s a gap that speaks volumes about the systemic challenges women face, from wage inequality to career breaks for caregiving. We know from our own research, and what we see globally, how stark the financial disparities are for women as they approach retirement. Women live longer than men, meaning they are likely to spend more years in retirement living alone, which comes with increased costs.
In New Zealand, the gender gap in retirement savings is more than a statistic, it’s a reflection of lived experiences. Women, on average, earn less than men, which translates into smaller KiwiSaver contributions and, ultimately, less financial security in retirement.
The gender pay gap is 8.6%. The gap for wāhine Māori, Pacific and Asian women, and disabled women, is significantly higher than the overall gap. If we have a gender pay gap, we’re going to have a gender retirement savings gap.
The 2022 Review of Retirement Income Policies highlighted the urgency of fixing this gap, not just for the sake of equality, but for the economic wellbeing of our society.
The numbers are telling. Our research reveals a 25% gender gap in average KiwiSaver balances, a figure that’s rising. Concerningly, this gap is even more pronounced among younger women, suggesting the gap starts early. It’s a worrying trend that demands attention and action.
Why does this gap exist? It’s a complex web of factors, but the largest contributors are tied to three areas: women often make less, work differently and live longer.
The implications are far-reaching. With living costs outpacing NZ Super, many Kiwis recognise that the public pension won’t cover all retirement expenses. For women, who typically have lower retirement savings, this reality poses a significant risk of financial hardship in their later years.
So, what can be done? We need to take a multi-faceted approach. The Government, private sector, researchers, employers and individuals all need to take action.
For the Government, this means enacting policies that address wage inequality. Support women’s financial education and empowerment. Keep the age of eligibility to New Zealand Super at 65 and provide women with the confidence they will have access to a guaranteed income in retirement.
Employers can contribute by offering retirement savings plans that account for career breaks and part-time work, which are more common in women’s employment patterns. That could include maintaining employer contributions to an employee’s KiwiSaver during parental leave (or other carer leave). Support staff, where financially able, to make voluntary contributions into their partner’s KiwiSaver during any periods of leave, to qualify for the government contribution.
On an individual level, it’s essential that women engage with financial planning early. This includes taking advantage of KiwiSaver and seeking financial advice tailored to their unique circumstances. Education is pivotal here. Sorted is a good place to start, providing invaluable and impartial free information and tools to understand and manage money.
International Women’s Day is a day to recognise the achievements of women and to acknowledge the challenges we continue to face. The retirement savings gap is one such challenge, and it’s time for all of us to play a part in closing it.
By raising awareness, advocating for policy changes and empowering women with the tools and knowledge to secure their financial futures, we can ensure women retire with the dignity and security they deserve.
How many words of four letters or more can you make? Each letter must be used only once and all words must contain the centre letter.
There is at least one nine-letter word.
No words starting with a capital are allowed, no plurals ending in s unless the word is also a verb, e.g. he fires the gun. 22