There is a 20 per cent gap between the average KiwiSaver balance for men and women. Photo / 123rf
There is a 20 per cent gap between the average KiwiSaver balance for men and women. Photo / 123rf
An academic says not enough action is being taken to close the retirement savings gap for women despite it being talked about for decades.
Dr Pushpa Wood, director of Massey University's financial education and research centre, was speaking on a panel at a summit held by the Financial Services Councilon Thursday to culminate three months of its "It starts with action" campaign.
The council, whose members include banks, KiwiSaver providers and insurance companies, undertook a drive to get more women taking action over their finances at the request of the Retirement Commission.
Retirement commissioner Jane Wrightson told the summit that most people would be okay in retirement if they did not divorce messily, lose a business or their home, keep their health and probably if they were a man.
"The fact remains almost all women are materially worse off financially than their male counterparts and the wealth gap directly affects life in retirement. Every single piece of research from every single entity confirms this."
The commission launched a national strategy at the end of last year and women were one of its three priority audiences.
Wrightson said the campaign had resulted in a powerful few months but said the challenge was what actions the sector as a whole would now take to address women's financial capability in the long term.
"Who will drive a plan, get it agreed and start to achieve targets? Which leaders are going to step up and commit time and resources and brain power to help?"
She said the retirement savings gap was driven by well-known factors - lower personal incomes of women, fewer opportunities to build up assets and contribute to KiwiSaver, poorer access to relevant and engaging financial education and an attitude towards money that sees women sometimes more conservative about their financial future or simply putting family first.
"As a wicked problem I know there is no simple solution but I also know you can build a complicated house one brick at a time with vision and a plan."
But Wood said whatever had been done in the past was not working.
"I came to this country in 1980 - it's been 42 years and I have been listening to the same kind of conversation for 42 years - there is a gender gap, there is a retirement income gap there is this gap and that gap. What have we done?
"We are still sitting here in 2022 saying the same thing that I heard in 1980. So whatever we are doing we are not doing it right or we are not asking the right people to do what we need to do."
Wood said the retirement savings gap was not a gender issue but a societal issue.
"It is an attitudinal level, it's a national issue, it is an international issue. Internationally we know the gap exists, but what we are we doing about it?"
She said she was frustrated at the lack of progress.
"If you hear frustration it is because I am frustrated, because what really annoys the hell out of me is when I keep hearing the same thing."
Dr Pushpa Wood, director of Massey University's financial education and research centre. Photo / Supplied
She asked those in the audience to make a guarantee to take action so in two years' time the industry would not be having the same conversation.
Wood also pointed to a lack of progress from the Government saying the Department of Maori Affairs was set up 1947, Ministry of Women was set up in 1984 and the Ministry of Pacific Women set up in 1992.
"These departments have been asked to address the issues - yet we are still in 2022 asking about why Maori and Pacific women are disadvantaged. And soon we will hear about how ethnic women are disadvantaged because that ministry is also being set up.
"We need to change our discourse, it is not a problem, it is not an issue, it is a challenge and a challenge we need to overcome."
What needs to be done about it?
Wood said all employers needed to carry out a financial resilience health check of their workers and put together a plan to address the gender equity gap within three years.
She challenged business leaders to put aside some of their profits to address the issue.
"For the next five years go without 20 per cent of your profit margin, establish a fund that is going to go towards addressing your gender pay gap. You are not going to be in stress with 20 per cent less of your profit, believe me. Eighty per cent is still going to keep you afloat."
Wood said the Government also needed to get on board as, if women did not save enough for their retirement, the Government would be picking up the tab regardless through benefits or subsidies.
"So instead of waiting for when I turn 65 why don't you establish a baseline so when I go into a motherhood role there is a baseline that automatically goes into my KiwiSaver.
"When I go into a caregiver role it automatically goes into my KiwiSaver so instead of waiting you start increasing my net worth from the time I take a break?"
Wood said there was a missing conversation around those not in the workforce.
"What is the action plan for those not in employment but are just as equally contributing to society?"
