- Recent research shows the gender wage gap is closing.
- However, men retire with almost double the super of women.
- Women are retiring later: the average retirement age for women was 63.8 years in 2015.
During 2014-15, women’s full-time average earnings rose 3.6 per cent from $1284 a week to $1330, whereas men’s went backwards by 1 per cent to $1673 from $1691, a recent survey found.
The strong wage growth for women – revealed in the latest Household, Income and labour Dynamics in Australia (HILDA) survey – followed two years of “almost unchanged” average earnings.
Managed by the Melbourne Institute of Applied Economic and Social Research, the survey collates data from the same 17,000 Australians who are interviewed each year.
Report author Roger Wilkins says the data shows “very tentative” signs the gap between male and female earnings may be closing.
“If this continues that might suggest we’re making some inroads into the incredibly persistent gender pay gap,” he said.
Women still lagging on super
However, a large divide persists between men and women at retirement, with men having almost double the superannuation of women. The mean balance of super at December 2015 was $454,221 for men and $230,907 for women.
Wilkins says this is because many women leave the workforce to have children just as their earnings are usually growing the most strongly.
“Women are also more likely to return to work part-time after having children,” he says. “Because they work fewer hours this lowers their future earnings growth as they’re getting less work experience and fewer promotions. I don’t think that gap will ever close.”
While about 70 percent of adults had superannuation at retirement between 2011 and 2015, just over 13 per cent of women retiring with a super balance spend most of it repaying outstanding debts, while 10 per cent of men do.
Women are retiring later
Australians are also working longer and retiring later than expected. Between 2012 and 2015 the average retirement age for men rose by four years from a decade earlier to 66.1, and was up to 63.8 years for women.
In 2001, 49 per cent of men and 68 per cent of women aged 60 to 64 were retired, while in 2015 only 28 per cent of men and 48 per cent of women in this age range were.
Among women aged 55 to 59, the proportion retired fell from 45 per cent in 2001 to 23 per cent in 2015.
However, Wilkins said this trend to work longer appeared to be driven by workers themselves.
“There has been a shift away from people reporting they retired due to poor health or job loss or from an employer pressuring them to retire,” he said. “Those reasons have been declining and more and more they are reporting retiring because they want to or are financially ready for retirement.”
Childcare costs still increasing
Meanwhile, a key area that is regularly monitored is childcare, and the survey showed costs are continuing to take a bigger chunk out of people’s pay, rising in real terms by 74 per cent for couples and 104 per cent for single parents between 2002 and 2015.
In 2002, median weekly expenditure on childcare was $93 for couple families and $56 for single parents. In 2015, this rose to $162 for couples and $114 for single parents, putting greater pressure on household finances.
Steps to help bridge the super gap:
- Multiple accounts? Research which one is best for you and roll your super into it.
- Add extra contributions to boost your super. (This ASIC MoneySmart calculator can help you work out how much).
- Planning a baby? A good time to get finances in order is before going on maternity leave. But you can do it anytime.