Women’s low financial confidence extends to superannuation: CFS

Further research, this time by Colonial First State (CFS), has indicated that low financial confidence reported by women also extends to superannuation and retirement ‘preparedness’. 

The survey of 2,250 Australians found that 62 per cent of women respondents felt they were not going to be able to achieve a comfortable retirement, compared to 47 per cent of men. Similarly, 34 per cent of women felt prepared for retirement compared to 53 per cent of men.

While only 45 per cent of women respondents said they knew what investments their superannuation has been put towards compared to 60 per cent of men, the survey also showcased the confidence-lifting effect of financial advice on women’s views of their retirement.

Women who engage with financial advice were more than twice as likely to feel financially prepared for retirement (62 per cent) than those who have not (28 per cent). Similarly, just over 80 per cent of women who have a financial adviser felt ‘on track’ to achieve their retirement goals, compared to 49 per cent who don’t.

“We know that most women are unaware of what assets their super is invested in, which suggests lower levels of engagement with their super. It’s crucial that any efforts to help women build their financial confidence consider their unique life decisions. There’s no one-size-fits-all solution, just as there isn’t a single path that all women follow in life,” CFS’ superannuation chief executive, Kelly Power, said.

“That’s why financial advice is so valuable. There are now more affordable advice options available; women can sit down with a professional adviser or use a digital advice tool to plan their retirement and ultimately receive the advice that empowers them.”

The research also suggested that if women felt ‘off track’ to reaching their retirement goals, they were less likely to consult their super fund or contribute more to their super.

“Adding a small amount to your superannuation each week can make a significant difference over time. Even modest contributions can grow substantially with the power of compound interest,” Power said.

“Many women may not realise that later in life, when they are in a better financial position, the superannuation system allows them to make catch-up contributions. These contributions mean you can make additional payments into your super fund beyond the standard annual cap to compensate for any shortfalls in previous years.

“This is particularly beneficial for women who may have taken career breaks or worked part-time due to caregiving responsibilities, resulting in lower superannuation balances. By utilising catch-up contributions, they can boost their retirement savings and work towards achieving a more comfortable and financially secure retirement.”