Rice Warner/Women in Super – Voluntary Contributions Research

Tailored solutions required to encourage Australian women to volunteer more savings for a better retirement.

New research commissioned by Women in Super and conducted by Rice Warner reveals a yawning retirement savings gap for Australian women and the inability of females to set aside voluntary contributions towards a better retirement nest egg.

Rice Warner analysis shows that the retirement savings gap for women of working age is currently at a staggering $383 billion.

The retirement savings projections are worse for women than men, reflecting an income disparity between genders but also a further underlying cause that exacerbates the problem.

Rice Warner deputy chief executive Melissa Fuller said the underlying problem of boosting the retirement savings for women demands a range of solutions. 

“One clear solution is to simply save more, earlier. Voluntary contributions (VC) to super are a no brainer. But Australian women are either unable or reluctant to activate this choice with their long-term savings,” she said.

Rice Warner research, presented at the recent Conference of Major Superannuation Funds in Brisbane, polled some 1500 female members of funds about their attitudes to contributing more to their retirement.

Are women simply disengaged about super? Ms. Fuller said: “The survey results tell a story of contradictions: while nine in 10 women actively check their superannuation account balances each year, only four in 10 know what investment option they are invested in.

“Not surprisingly, older women are more engaged than their younger counterparts with their super, but seven in 10 so-called ‘engaged’ females don’t actually know what their retirement income needs are.

“The old adage “fail to plan, plan to fail” comes to mind for this statistic,” she said.

However, the leading reason women are failing to make voluntary contributions is not just planning; it’s the reality of affordability.

“Six in 10 females say affordability is a barrier. Women are directing their discretionary monies to paying off debt,” Ms. Fuller said.

Another factor is trust – women have simply tuned out to the messages from their super fund because they do not trust what they hear or they do not trust the Government to make no further changes to the system.

“Either way, there is a long way to go before the expectation that females in our society may enjoy a comfortable life in retirement matches the current reality”.

Women in Super National Chair, Cate Wood, said improvements to the level of retirement savings for females will only come through a combination of policy initiatives and a more concerted effort by funds to stay alert to engagement levels, build trust, together with appropriate advice models that work.

“Clearly, whilst voluntary contributions have a role to play if women are to improve their level of retirement savings, the survey results confirm that there needs to be measures which guarantee increases – like the Low Income Super Contribution, payment of SG on paid parental leave and removal of the $450 SG eligibility threshold. For voluntary contributions to have any significant impact, funds will need to increase engagement levels.  This may mean, for example, the deployment of new technological innovations to better segment members, define specific needs, and tailor real workable solutions to them.”

For further information please contact:

Melissa Fuller, Deputy Chief Executive Officer – Rice Warner

02 9293 3730

Or

Cate Wood, National Chair – Women in Super

0417 391 669