The gender pay gap is the main cause of women’s financial disadvantage in retirement, rather than career breaks, research from The Australia Institute has claimed.
The report, 'What’s choice got to do with it?’ showed the gap in retirement savings between men and women – on average women retire with about half the superannuation of men – persists even among women who stay in full-time work, do not have children, and do not care for elderly parents.
Using four hypothetical women’s careers, the analysis showed the four women earned between 44 per cent and 88 per cent the superannuation of a male of the same age.
The report factored in the Australian Bureau of Statistics’ latest data on the gender pay gap – that women earn 17.5 per cent less than men on average – to highlight that, on the average wage and over the same uninterrupted period of time, a woman earned 82.5 per cent of her male counterpart’s wages.
It said a range of factors impacting on women’s lives and creating 'accumulated poverty’ was reflected in the superannuation gender pay gap.
“The uncomfortable facts are that women earn less than men and spend more time out of the workforce caring for children and elderly parents,” report author Prue Cameron said.
“All of these facts ensure that women will retire with less money than men and, bizarrely, receive far fewer taxpayer contributions to their superannuation than men.”
The report said Australia’s retirement income system magnified the gender pay gap in retirement.
“Treasury estimates that around 30 per cent of the $50 billion annual cost of tax concessions for superannuation flow to the wealthiest 5 per cent of the population, while none of that $50 billion helps to boost the retirement savings of the poorest 20 per cent,” it said.
