Women less engaged with their super funds: Vanguard

Regardless of their retirement status, women are displaying less engagement with their super fund and a third have never initiated contact with their fund, according to new analysis.

Vanguard’s latest How Australia Retires study, which surveyed over 1,800 working and retired Australians, found women tend to become more engaged only as they approach retirement while men remain engaged across all life stages.

Less than half (46 per cent) of pre-retired women have initiated contact with their super fund in the last 12 months, with the figure rising to 66 per cent of female retirees, compared to 58 per cent of pre-retired men and 58 per cent of male retirees.

Women were also less inclined (22 per cent) than men (30 per cent) to make additional contributions to their super pre-retirement and the gap widened at retirement (20 per cent versus 34 per cent).

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According to the study, Australian women face substantial gender-based differences, in home ownership, personal super balances, personal investments, annual income, and in overall confidence levels, leading up to retirement.

“There’s a whole spectrum of circumstances that mean women aren’t on equal footing when it comes to being able to prepare for retirement or to retire well,” noted Shannon Nutter, executive consultant at the firm.

“On average, Australian women earn 13 per cent less than their male counterparts, often work in industries with lower wages, take time off to manage home-related issues, care for children, and live longer.

“All this means that women need to save or invest more to retire well, but have less assets to start with.”

In terms of assets, a third of working age women reported a super balance of less than $20,000 versus 12 per cent of men in the same category. Conversely, around 60 per cent of working age males reported a balance over $100,000, over double the proportion of women (28 per cent).

When it came to pre-retirees, almost three-quarters (73 per cent) of women reported personal income under $75,000 whereas almost 70 per cent of men reported earnings in the $50,000–$200,000 range.

For both men and women there is a big difference in housing circumstances connected to marital status, with single respondents having a much higher rate of renting.

Vanguard also found a marked difference in expectations of how long retirement funds will need to last in retirement among pre-retirees. A higher proportion of female pre-retirees (22.1 per cent) expect to need their retirement funds to last for 30 years or more in comparison to their male counterparts (13.7 per cent). 

For those already in retirement, 42 per cent of female retirees reported that at the outset, they were unsure how long they needed their retirement funds to last, in contrast to only 23 per cent of male retirees.

Most pre-retirees have never consulted a financial adviser, though the figure is higher for women (70 per cent) than for men (56 per cent). 

More women think that ongoing guidance (30 per cent), an age-appropriate plan from their super fund (27 per cent), and having a clear understanding of what they could do to improve their financial outlook for retirement (34 per cent) would be helpful in working towards the desired retirement lifestyle.

While there are a number of personal actions that women can take, the onus is also on other parties such as spouses, the government, and the superannuation industry to get involved, Nutter added.

“This analysis has highlighted in particular, the areas in which the industry can provide for female clients to ensure everyone, equally, can move more confidently towards a great retirement,” she said.

“Managing personal finances and thinking about money can feel intimidating and it’s easy to disengage and kick it down the road or let someone else handle it. But women can and should do more.”