How to close the gender retirement gap

The average KiwiSaver balance for men is 20% higher than it is for women

How to close the gender retirement gap

Pay inequity and career interruptions have led to women arriving at retirement with less, with men having 20% more in an average KiwiSaver balance than women.

This gap is even wider for women of Māori, Pasifika, and Asian descent. 

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“The gender retirement gap is real,” said Jane Wrightson, New Zealand retirement commissioner, at a Westpac-hosted discussion on the topic. “The data is clear, and the reasons are obvious. We earn less over our working lifetimes, we spend more time out of the workforce, we bounce back less successfully after financial life shocks, like divorce, and we live longer.”

And while the issue is clear, the question really is how to go about reducing the gap.

“The solutions are not simple,” Wrightson said. “The answer is less likely to be more education – there’s plenty of that out there for those that wish to find it – and nudging people to find it is the hard bit. The answer is more likely to be smarter, more corrective ways to nudge long-term behaviour change.”

The discussion panel also included Michelle Corse-Scott from Milford Asset Management and David Boyle from Mint Asset Management.

Read next: Recent surge in property prices may have widened gender wealth gap – CoreLogic

To help guide such a change in behaviour, Corse-Scott said it is crucial to talk more openly about money and savings. 

“I think we need to learn to talk about money, and specifically KiwiSaver and retirement,” she said. “If we speak about it often and openly, people get more comfortable with the topic and start understanding a few more of the levers that affect their KiwiSaver. By being open to conversations about KiwiSaver, it’s possible for each of us to put ourselves into a much better position, to be better informed and to understand how to grow it.”

Boyle said these conversations should start in school and that financial independence is a message that should be shared, especially with female students.

“It’s important to ensure each person takes control of and manages their own financial wellbeing,” he said. “One of the key messages I’d like to see in schools, in the curriculum, and in financial capability for students, and for female students, it needs to be loud and clear that the material that we do develop is building their own individual financial independence.”