Freezing SG increase will leave many retired women in the cold
The Australian Institute of Superannuation Trustees (AIST) has today warned that putting the Super Guarantee increase on ice at 9.5 per cent – as advocated by opponents of Australia’s universal superannuation system – will entrench the ongoing, unacceptable chasm in retirement outcomes between men and women.
Women currently aged between 35 and 60 will retire with up to 30 per cent less super than their male counterparts, with an estimated 40 per cent of single women retiring in poverty.
AIST head of advocacy, Ailsa Goodwin, said increasing the Superannuation Guarantee to 12% as originally intended would make the single greatest contribution to improving women’s retirement balances and was necessary to address the unique challenges that women face when it comes to paid work.
“Leaving super at 9.5 per cent will consign women to financial hardship in retirement,” Ms Goodwin said. “Women live longer than men and are increasingly approaching retirement without the safety net of home ownership relied upon by previous generations.”
The gender gap in superannuation savings is caused by a number of factors including women being paid less than men, and women taking more time out of work to raise children and care for family members. These income differences are amplified by superannuation tax settings which penalise low income earners, and they compound over a lifetime.
Ms Goodwin said unlike most low income women, many high income earners – including politicians – already received super contributions of 12 per cent or higher.
“What is good enough for them, should be good enough for the women of Australia,” Ms Goodwin said, adding that high income earners also tended to have greater opportunities to work longer before they retired.
The SG is set to increase gradually from 9.5 per cent now to 12 per cent by July 1, 2025.