A third of Aussie women are retiring in poverty
Industry Super Australia (ISA) has told a Senate Inquiry that urgent changes must be made to tax concessions in order to close the gender cap, which shows that across the board women are retiring with 44 per cent less super than men, which is a startling finding to say the least!
The deputy director of the ISA Robbie Campo, said that a big reason for this is current superannuation settings are currently weighted against women, “These settings magnify rather than moderate gender differences in lifetimes earnings. For example, the persistent gender pay gap, currently at 18 per cent, blows out to a far worse gap in super savings of 44 per cent. We can’t afford a system that fails half of the population so badly.”
The submission from ISA recommended a raft of reforms which would extend as far as paying the super guarantee on parental leave and moderating current changes to the pension on a current means test. Mr Campo said current tax concessions disproportionately benefitted top income earners, stating, “For instance, single men in the top 1 per cent of income earner gain the most from the system, benefitting from an estimated $2.8 million in tax concessions over their working lifetime. This supercharges their retirement income, even though they don’t need financial help to reach a comfortable standard. It makes no sense.”
There’s a huge need for reform and Australian women will continue to experience deep economic insecurity in retirement unless the government makes drastic changes to superannuation. The fact that women retirement with $142,000 less super than men and that 70 per cent of single, retired women rely on the full age pension is startling, but the most startling statistic is that 39 per cent of single, retiring women are living in poverty. And if ISA projections are anything to go by, the expected declining rates of home ownership will only make this worse.
And it can’t just be a matter on women relying on a partner in retirement. A third of women in retirement age actually aren’t in a relationship, while 40 per cent of people who are actually in a relationship have insufficient savings to retire.
The moral of the story is that there are some big problems with the superannuation, and something urgently has to be done to protect the people in the system that the current iteration of the superannuation system is letting down most.
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