Australia records subpar gender wealth gap

Yasmine Raso

Senior Journalist, Financial Newswire

4 November 2022

New research from WTW has revealed the global difference in wealth accumulation between men and women at the point of retirement, with Australian women only expected to accumulate 72 per cent of men’s wealth at retirement.  

Australia’s result was two points below the global average at 74 per cent, according to the 2022 WTW Global Gender Wealth Equity report released on Thursday in collaboration with the World Economic Forum (WEF), while the Asia Pacific region also recorded one of the lowest wealth gaps.

Differences in expected wealth accumulation ranged from 64 per cent to 90 per cent across Asia Pacific markets, with only six markets recording a higher wealth amount at retirement for women when compared to the global average: China (78 per cent), Philippines (79 per cent), Singapore (79 per cent) and Japan (82 per cent).

“The results from our global analysis are startling. It shows that there is a gender wealth gap consistently across the 39 countries that we studied,” Manjit Basi, Senior Director, Integrated & Global Solutions at WTW, said.

“The primary drivers contributing to gender-based wealth disparity include gender pay gaps and delayed career trajectories. Additionally, gaps in financial literacy and family caregiving responsibilities outside the workplace influence women’s participation in paid employment and therefore their ability to build wealth.”

The report also found the gender wealth gap at retirement increased for women in senior positions with those in senior expert and leadership roles accumulating 62 per cent less wealth than their male counterparts. Females in mid-level professional and technical roles reached retirement with 69 per cent less wealth.

This comes as only seven per cent of Australian women are in senior expert and leadership positions, which was two per cent lower than the global average. The research also highlighted how the current structure of superannuation presents barriers for women and contributes to the nation’s lower Wealth Equity Index result.

Higher contribution caps allowing higher-earning males to gain greater superannuation wealth during their working life is compounded with females losing superannuation guarantee contributions during taking career breaks and parental leave periods.

“It is surprising that wealth equity for women in senior expert and leadership roles remains a particular challenge for Australia,” Louise Campbell, Head of Retirement Australia at WTW, said.

“It’s imperative that activities around gender diversity, equity and inclusion broaden to look at economic wealth at the end of women’s working careers.”

“Pay is a fundamental factor that underlies the gender wealth gap and while addressing the gender pay gap will partially close the wealth gap, it won’t eliminate it entirely.

“Enabling career progression and designing total rewards programs which do not penalise women for taking career breaks and assuming career responsibilities is imperative to provide a more equitable wealth outcome for Australian women.”