Roy Morgan research finds women’s superannuation balances growing faster than men’s, but gap still exists

It is heartening to see women finally outpacing men in an important investment area and it is not too late to see the trend accelerate further.

Some Roy Morgan research has found that women’s average superannuation balances are actually growing at a faster rate than men’s, while ownership levels have also risen.

However, it is not all good news, with the current gender gap meaning that the “average” woman will need to wait 40 years before true superannuation equality is reached at the current rates of increase.

Using a survey with a substantial half a million participants, the research found that since 2012, the average super balance for women has grown faster at 38% to $154,000 versus men’s 26% to $216,000.

Back in 2012, women’s retirement savings averaged $111,000 while men had $172,000 in their accounts.

More women now have super accounts

Things are also improving on the spread of superannuation among women, with changes to minimum salaries needed for compulsory super set to continue that trend.

At the moment, 70.9% of women have a super account while 74.8% of men have one.

It was a very different situation a decade ago, with only 66.2% of women having a super account while 74.8% of men had one.

That means the account ownership gap has effectively reduced from 8.6% to 3.9%.

In terms of income, women with superannuation who currently work on average earn $72,000, compared to men who make $95,300 a year, so even with the improved spread and growth rate for women’s super, the overall balance gap will take a very long time to be overcome.

Part-time work reduces women’s super

Female workers from all age groups have much lower average incomes than males, with the research attributes to a high level of part-time work for females (around 45.3%).

That is largely to blame for the fact that women in the 18-24 age bracket on average earn 85.8% of the wage of males of the same age – by far the closest income gap for any of the age groups.

By the time you reach the 65 years and over bracket, this figure has dropped to 70.6% for women.

“Clearly part-time work is associated with a lower annual income than full-time work and this continues to contribute to the ongoing gender superannuation gap,” according to Roy Morgan chief executive Michele Levine.

“The latest figures on income show that average female incomes are at only around 76% of the male average, which in turn leads to lower superannuation contributions and balances compared to males.”

Catch up will take 40 years

Industry Super Australia has calculated that at current growth rates it will take 40 years for women to catch up to men’s super balance, looking at the median super balance for a woman in her early 60s of $159,600 compared to the male median of $210,800.

That has led to a growing campaign for superannuation payments to continue when people are on parental leave, which would help women and men who take a break from the workforce to care for children to maintain some superannuation balance growth.

Payments on work breaks important

The other big issue, of course, is that breaks in employment also often lead to women earning lower pay when they return to the workforce which continues to foster the wage and superannuation gap over time.

However, at least the latest figures show that there has been some progress already.

Another strategy that is available and often overlooked if there are some savings is for the working partner to make a co-contribution to the super of the non-working spouse, using the government payment to keep the super balance rising faster.

It can be a very effective strategy but many people don’t seem to know about it.