Overcoming inequality – how women can secure their financial independence


Perpetual Private Insights

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This March, International Women’s Day is an opportunity to celebrate women’s achievement, raise awareness against bias and take action to accelerate women’s equality. It’s also a time to reflect on what more we can do, as a society, to achieve true gender equality. One big area is money and finance. While we’re making progress, there’s still more to be done – and the research supports this.

According to the Australian Bureau of Statistics, in February 2021 the national gender pay gap sits at 13.4% for full-time employees. This equates to an average $242 per week difference between what women and men take home.1 Lower lifetime earnings is a major reason why women are retiring with around 47% less super than men.2

The gender pay gap isn’t the only financial hurdle women face. Career breaks to raise children, part-time work, a lower appetite for risk and living longer than men all contribute to women being less likely than men to meet their retirement goals.

“While women are traditionally considered care givers, when it comes to retirement savings, it’s important to prioritise yourself,” says Julie Hough, a partner with Fordham in NSW.

“Taking charge of your financial knowledge will give you independence and the confidence that you will be financially secure in retirement,” says Julie. 

Here are some steps to get you started:

Set your goals

In the early years of retirement, you may dream of travel and adventure. In the latter years, knowing you’ll be cared for is priceless.

Whatever your goals, they’re more likely to happen with a robust, long-term plan.

If you’re nearing retirement or even in your retirement years, it’s important to revisit (or set) your personal goals. Your goals will give you something to work towards and excite you, but more importantly, they’re the first step to a financial plan – and portfolio of investments – that can help you achieve them.

Do more than save – invest!

“While there’s a focus on the income and super gap, the ‘risk gap’ between women and men also affects retirement outcomes. Women are more likely to save for, rather than invest for their retirement,” says Julie.

“While keeping some money aside in a savings account or term deposit is always a good idea, there is the risk of being too cautious.”

Perpetual Private Research Analyst, Sarah Fox says that risk aversion often means women are piling a lot into cash.  

“With record low interest rates, putting money into a savings account or term deposits means your retirement savings are going backwards in real terms,” says Sarah.

“As inflation comes into it, the cash they’ve been holding for so long might not be worth as much as when they started saving.”

While some risk aversion is an inherent difference between the sexes, women are more likely to lack confidence when deciding where to invest – leading to ‘safer’ investment choices. When women have knowledge about their investment options, they have the confidence to create a diversified, risk-appropriate portfolio of investments, including some invested in the stock market where there is greater potential for growth.

Once invested, women’s lower appetite for risk can actually be beneficial. They’re less inclined than men to move into and out of investments in response to prevailing market conditions – a habit that is time consuming, expensive and will almost certainly leave an investment portfolio worse off.

There are lots of resources to help you build your investing knowledge, including Perpetual’s own Financial Acuwomen site. Most importantly, talk to a financial adviser who can work with you each step of the way to help you achieve your goals.   

Make the most of super

Super is the most tax-effective way to invest for your retirement. Women retiring with substantially less super than men, partly due to career breaks and maternity leave, so it’s important to understand how super can play a part in the years leading up to retirement.

Existing superannuation law allows you to make up this gap by contributing extra when you return to work. The government allows you to put $25,000 each year* into your super before tax, lowering your taxable income so you pay less tax overall.

“Whenever you have your money in a low-tax environment instead of a high tax environment you’re going to be better off. But there are a lot of rules around super which can be quite complicated,” says Julie.

“You should speak to your financial adviser. They can help you create an optimal contribution strategy and talk about your options for drawing on super in retirement when the time comes.”

Get involved in financial decisions

According to a study of high net worth individuals by investment bank UBS, 85% of women take care of day to day expenses, yet 58% defer long-term financial decisions to their spouse.3

Importantly though, when women do become involved in the financial decision making, over 90% feel less stressed and crucially, believe fewer mistakes are made when both spouses are involved.

“Every household is different, particularly when it comes to managing money. However, when you take an active interest in household financial decisions, you’re taking a positive step towards financial knowledge and independence – something that pays off in the long run,” says Sarah.

Around 40% of us will live alone at some stage between 65 and 85 – whether that’s from divorce or outliving your spouse.4

“At one stage or another, women are likely to have sole responsibility of the finances in retirement,” Sarah added.

“That’s why knowing how to look after yourself financially is vital – whether it’s managing household expenses, being able to withstand the shock of an unexpected divorce or simply having peace of mind that you can live comfortably in retirement.”

As the gender pay gap and inequality in super shows, when it comes to your money, you can’t control everything. That’s why it’s important to make the most of what you can.

Good financial advice can give women the knowledge and confidence to overcome some of their wealth challenges, achieve financial independence and ultimately, close the gender wealth gap.


*From 1 July 2021 the concessional contributions cap will increase to $27,500
1. https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/average-weekly-earnings-australia/latest-release
2. https://www.womeninsuper.com.au/content/the-facts-about-women-and-super/gjumzs
3. https://www.ubs.com/global/en/media/display-page-ndp/en-20190306-financial-security.html
4. https://www.aihw.gov.au/reports/older-people/older-australia-at-a-glance/contents/health-and-aged-care-service-use/aged-care-assessments

Talk to us

To talk about a plan for your financial security in retirement, talk to your Perpetual Private financial adviser or call us on 1800 631 381.

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This information has been prepared by PTCo. It contains general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial or other adviser, whether the information is suitable for your circumstances. The tax information contained in this document is not tax advice and should not be relied on as such. This information, including any assumptions and conclusions, is not intended to be a comprehensive statement of relevant practice or law that is often complex and can change. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. To view the Perpetual Group's Financial Services Guide, please click here.