Women’s financial health at greater risk from COVID-19 crisis

Some women are having to withdraw entire super balances to survive the pandemic.

Women’s financial health at greater risk

Women are the biggest victims of financial strife in the COVID-19 crisis, says new research from AMP, with some women forced to access entire super balances just to get through he pandemic.

“In the past, economic downturns have helped advance women’s financial equality,” states AMP in the Women and super: taking control during COVID-19 report.

“During World War II, women were encouraged to enter the paid workforce while men went off to war, giving many the first taste of independence. And during the downturn of the 1980s, women once again stepped into the role of income earners and female workers increased by 6.2 per cent between 1981 and 1989.

“Unfortunately, early indicators suggest that the COVID-19 crisis appears not to be following suit.”

In fact, due to COVID-19, women’s financial health is at greater risk and the already prominent super gap will widen as a result.

Flexible jobs traditionally fulfilled by women, including those in retail, hospitality, events and food service businesses, have been part of the early casualties of COVID-19 cuts. Many women have been asked to take unpaid leave or work reduced hours and have suffered the biggest pay cuts in 11 of the 19 sectors of the economy and job losses across 14 of 19 sectors.

Women who already retire with around one third less in their retirement savings than men will suffer even more from the loss of super contributions during the downturn as well as the losses incurred from potential compound interest earnings over time caused by raiding super accounts early.

Women also tend to live longer than men (80.7 years for men and 84.9 years for women), so their retirement savings need to last longer.

AMP customer analysis revealed that women are withdrawing slightly less than men but on average, taking out 21 per cent of their starting super balances compared to 17 per cent for men.

However, 14 per cent of women have cleared out their entire super balance as a result of the withdrawals compared to 12 per cent of men.

The early release scheme may help many women through this crisis but could put them further behind in the long run, says AMP’s managing director of superannuation Lara Bourguignon.

“We know that women are already behind men in a number of financial measures, including longer-term savings, retiring with 31 per cent less super at retirement. This is being further impacted by their greater proportion of early super withdrawals,” she told 9news.com.au.

Ms Bourguignon suggest exhausting all other government assistance plans such as JobKeeper and coronavirus supplements prior to accessing super early, using ASIC’s MoneySmart retirement planners tool, checking whether they qualify for the low income super tax offset (LISTO) and utilising spouse super contributions where possible.

This benefit is available where one spouse (husband, wife, de facto or same-sex partner) contributes an amount of money into their partner’s super. Providing the receiving partner is a low-middle income earner, or unemployed, the contributing spouse may be eligible for a tax offset.

“It will be a while before the full effects of COVID-19 on women’s finances are known. However, by improving financial literacy and equipping themselves with knowledge, they can make informed financial decisions over the areas they can control, giving them a better chance of being prepared for the future,” states AMP.

Have you had to access any of your super to get you or your family through the coronavirus crisis?

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    COMMENTS

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    29th May 2020
    11:27am
    Problem is women spent about twice as much as men too.
    older&wiser
    29th May 2020
    11:35am
    Utter garbage....they are the most frugal ones.
    Anonymous
    29th May 2020
    11:58am
    Not in my house.
    Golden Oldie
    29th May 2020
    2:33pm
    Do you actually do any shopping? I was married for 10 years, did ALL the shopping. Hubby charged everything up, like car repairs, left me to pay the bills. Had other relationships, and because I was working, provided all the household expenses.
    Tzuki
    29th May 2020
    3:34pm
    Retiring Well I can disagree by experience. My husband wastes copious amounts on cigarettes and xlotto, and always has plenty of alcohol. He spends $200+ more than me a week on Himself. I sometimes don't spend $1 on my personal self.
    Anonymous
    29th May 2020
    3:50pm
    NO lotto, fags, booze or anything like that for me. I can't remember the last I bought anything other than food.

    29th May 2020
    11:27am
    Problem is women spent about twice as much as men too.
    Horace Cope
    29th May 2020
    12:10pm
    Hasn't this subject been done to death? Just to make it very clear; women work, on average, less hours than men, therefore they earn less money, therefore they attract less super. There are also men in the same position who, by choice or circumstances, work less than the usual 38 hour week but nobody is writing a sob story about them.
    Eddy
    29th May 2020
    1:48pm
    Horace, you forgot to mention that women tend to be paid less than men.
    I know when my wife was working as a nurse her base rate of pay was lower than the cleaners or the drivers or the storemen at her hospital, in fact the lowest paid people on staff were the nurses and nursing aides. Female dominated professions. like nursing and teaching, have been exploited by governments of all persuasions for decades. Every time nurses and teachers threatened to strike for better pay and conditions they were labelled as deserting their patients or their students.
    I have always regarded permitting raiding superannuation accounts as bad policy, but I can understand the reasons for it, some people were left in the position of having m
    no other option. I also do not criticise the government for getting the sums wrong on how much the rescue package was going to cost, everything was done in such a rush there was no time for cross checking the figures. Now we know that the figures were overestimated by $60 billion it is time to revisit the criteria used. If we could afford $130 billion a few months ago then why can we not afford $130 billion now. One immediate thing government can do is to expand the criteria for eligibility for Jobkeeper and Jobseeker. Then reimburse the money taken from super accounts so these desperate people are not doubly disadvantaged.
    Maggie
    29th May 2020
    2:36pm
    You miss the point. Women with the same qualifications as men,who work full time for the same number of years as men mainly still end up with less than men because they have been paid less than men. Think on that.
    Anonymous
    29th May 2020
    3:52pm
    If women with same job and same pay end up worse off than men then they are spending too much money on stuff they don't need. There is no other excuse.
    Horace Cope
    29th May 2020
    5:09pm
    Gee Eddy, what about comparing like with like. Your comparison is about one occupation as against another where different awards come into play. There are male nurses and male teachers and the pay rate is the same for each. It's not government money, Eddy, it's taxpayers money that is being spent so a saving of any amount means less that taxpayers have to pay.

    Maggie, all awards in the workplace in Australia have no mention of gender which means men and women are paid equally. Men are more likely to work overtime than women and therefore get more pay. Women take time off to have and raise a family which also means that if they don't work, they don't get paid nor do they attract super. People who work outside the umbrella of awards invariably negotiate a salary and those who are best at negotiation attract the best pay, regardless of gender.
    KSS
    29th May 2020
    7:54pm
    No Maggie, not these days. As Horace says, most industries work to an award with prescribed rates of pay. If a woman is doing the same job with the same hours she is paid the same as the man doing the same things. Now each industry has its own award and true the rates of pay and conditions may differ between awards, but men and women (and an other gender description) will be paid under the same award at the same rates. If women on these awards are paid less it is because they work fewer hours. Fewer hours means less pay and ultimately less super. But that is not a reason to whinge that women have less super. If they worked more hours they would have more super.

    Now for industries or occupations that do not come under an award, salaries are negotiated between the employer and employee. it is up to the employee to accept or reject an offer an employer makes. If a professional woman cannot negotiate herself a salary equal to that of a man in the same role, one must question her ability to fulfill the role she wants. Far better you advocate for more training in negotiation skills than simply bemoan the archaic notion that women are paid less than men. Boo Hoo to that.
    Eddy
    29th May 2020
    9:37pm
    Horace and KSS, you are not taking into consideration that equal pay for equal work is a fairly recent innovation. The first equal pay for equal work judgement came into effect in 1969. However the judgement included that equal pay was not applicable:
    "where the work in question is essentially or usually performed by females but is work upon which male employees may also be employed".
    In other words where females and males were doing the same work in a female dominated profession (like nursing, teaching, library services) then equal pay was not applicable.
    It was not until federal legislation in 2009 and 2012 mandated equal pay for females as a legal requirement. In 2004 the gender pay gap was about 15%, in 2015 it was closer to 19%.
    Even today most women were paid less than men and therefore accumulate less superannuation.

    3rd Jun 2020
    4:27am
    Look for a college paper examples ? You can find tons of samples of various academic assignments on this website. They are free to use.


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