Retirement
New fears for flow-on effects of early access to super
There are fresh concerns that the gender super gap will widen even further for females who have had to rely on the government’s early access to super scheme.
New fears for flow-on effects of early access to super
There are fresh concerns that the gender super gap will widen even further for females who have had to rely on the government’s early access to super scheme.
Joint analysis of profit-to-member fund data from the Australian Institute of Superannuation Trustees (AIST) and Women in Super (WIS) that was presented at the 2020 Women’s Super Summit found that the scheme had “compounded the structural inequities in our super system for females who had accessed the scheme”.
Based on more than 750,000 super withdrawals made using the scheme, the data showed female applicants aged 25 to 34 had a starting super fund balance pre-COVID-19 of $19,906 – 21 per cent less than the average male in the same age bracket, who has $25,200.
Since the government initiative began, the gap has now widened to 46 per cent.
In addition, AIST and WIS said it discovered that females who were accessing their super early usually had lower balances to begin with, suggesting they were mostly low-income women.
Men were more likely than women to make an application for early release, but women withdrew more as a portion of their already lower balance.
The data showed women aged 25 to 34 withdrew on average 35 per cent of their balance, while men in the same age bracket withdrew 29 per cent of their balance.
The same was true across all age groups, when comparisons remained within age cohort splits.
According to AIST head of advocacy Melisa Birks, women who relied on the scheme “are now even further behind the eight ball when it comes to retirement savings”.
She said in normal times, the gender super gap “starts to become more evident when many women take a career break to care for their first child in their 30s”.
“Some of these women will now be saving for their retirement pretty much from scratch when they return to work.”
Weighing in, national chair of Women in Super, Cate Wood, said: “We are seeing increasing numbers of older women facing poverty in retirement.
“We cannot stand by and watch more generations face the same plight.”
The new concerns come after last week’s Equal Pay Day, when the average pay gap between men and women in 2020 was exposed.
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