Women have lower sums in their KiwiSaver accounts than men and are less likely to have other investments to help fund their retirement, a new survey by Westpac NZ has found.
The findings highlight a particularly relevant issue as women have to fund more years in retirement because of their longer life expectancy.
Westpac General Manager of Consumer Banking & Wealth Simon Power said the results were another reminder of the wage differences between men and women.
“We usually talk about the gender pay gap in terms of its effect on women’s take home pay.
“This research shows the flow-on effect on retirement savings. Simply put, it appears men have more income available to set aside for retirement and this is impacting KiwiSaver balances.”
More than a thousand KiwiSaver members from different schemes were surveyed.
Mr Power said four per cent of women reported having more than $50,000 set aside in KiwiSaver for their retirement, compared to 13 per cent of men.
Additionally, 24 per cent of women reported making contributions to KiwiSaver above the minimum rate of three per cent of their pay, compared to 31 per cent of men.
“What we’re hearing is that more men have larger amounts of money put aside, and are contributing to KiwiSaver at a higher rate, than women. Furthermore, 52 per cent of men told us they had other investments to help fund their retirement, compared to just 39 per cent of women.
“It’s a worry when you consider a woman born in 2000 has a life expectancy of 92 years, compared with 89.6 years for a male born in the same year. Women need more money in retirement, not less.”
Mr Power encouraged women who have children to keep contributing to KiwiSaver through their maternity leave, if possible.
“Of course, money can be tight after the birth of a baby. But, every $1 contributed will trigger a 50c contribution from the Government (up to a maximum of $521.43) through the Member Tax Credit.”
Fulltime mothers (or fathers) who were not on parental leave could also earn the Member Tax Credit if they made voluntary contributions to KiwiSaver.
“Another good tip – and this applies to men as well – is to make sure you are in the most appropriate type of fund, based on your appetite for risk and how soon you’ll need to make a withdrawal from your KiwiSaver account.”
Survey respondents were also asked about whether they had estimated the amount of savings needed to fund their retirement.
Twenty-five per cent of women said they had done this, compared to 38 per cent of men.