The gender pay gap is spilling into KiwiSaver balances – and it's a worry
Women are contributing less into KiwiSaver than men, have lower average balances and are less likely to have other investments that can pay for their retirement, new Westpac NZ research reveals.
The bank surveyed more than a thousand KiwiSaver members to glean the insights, which found a higher proportion of women weren't contributing to the retirement scheme at all.
Nearly a third of women in the survey have less than $5000 in their KiwiSaver accounts (compared with 19 per cent of men) while only 4 per cent had more than $50,000 (compared with 13 per cent of men).
Westpac says the survey results show the impact the gender pay gap has in retirement savings and that the problem is compounded by women having a longer life expectancy than men.
The national gender pay gap, according to latest research, remains at 12 per cent and has barely narrowed over the past decade.
"We usually talk about the gender pay gap in terms of its effect on women's take-home pay," said Simon Power, Westpac's general manager of consumer banking and wealth.
"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."
"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."
Only a quarter of women in the survey had estimated the amount of money they would need in retirement compared to 38 per cent of men.
Power also encouraged people who took time out of paid work to have children to try keep contributing to KiwiSaver.
"Of course, money can be tight after the birth of a baby. But, every dollar contributed will trigger a 50c contribution from the Government (up to a maximum of $521.43) through the Member Tax Credit."
Westpac survey results
What is your current contribution rate into KiwiSaver?
0% - Men 15% vs Women 20% (not contributing or on a contributions holiday)
3% - Men 35% vs Women 38%
4% - Men 27% vs Women 22%
8% - Men 12% vs Women 8%
(Other/Not sure Men 11% vs Women 12%)
Approximately how much do you have invested in KiwiSaver?
Under $5000 – Men 19% vs Women 30%
$5000-$9999 – Men 17% vs Women 20%
$10,000-$29,999 – Men 30% vs Women 29%
$30,000-$49,999 – Men 14% vs Women 11%
$50,000+ - Men 13% vs Women 4%
(Not sure – Men 7% vs Women 6%)