In a push to help bridge the gender wealth gap, ANZ is offering free financial advice to women with less than $50,000 in superannuation. The bank is also helping its own female staff to retire better funded with an additional $500-a-year contribution to their super fund.
The moves are aimed at addressing the gender pay gap that sees women earn, on average $700,000 less than men over their career. “We’re calling out and trying to close this gap – [the initiative] is not perfect, but we’re making progress,” the bank’s chief executive of global wealth Joyce Phillips said. “Over time, we believe these new measures will help improve the financial security of women at ANZ by directly targeting the areas of advice, superannuation and financial education.”
The opportunities for women to enter higher education have improved drastically over the years, with 42 per cent of women aged between 25-29 earning a degree, compared with 31 per cent of men in the same age bracket. However, this doesn’t translate into equal salaries with women being paid on average $15,000 less per year than men and retiring with half the superannuation of their male counterparts.
Almost 40 per cent of women report having no income of their own at retirement age and 20 per cent retire with no superannuation at all. Sadly, 15 per cent of women will retire in poverty.
To help its female customers make the most of what little they do have, ANZ has trained its financial planners and private bankers to better connect with women.
“There is an opportunity for us to address these imbalances at ANZ, and to work to redesign the systems within both business and the community to support women’s success and financial wellbeing for the future,” Ms Phillips said.
Read more at the Sydney Morning Herald
All too often we’re more than happy to bash the big four banks for being all take and no give, so it’s nice to finally hear of one trying to make a difference, even if it’s only a small step in the right direction.
The reality is that a vast number of people are financially unprepared for retirement. Many simply haven’t had the chance to save enough super due to the employer superannuation guarantee only being in place since 1991, while others may have assumed that the Age Pension would have risen sufficiently over the years to a level that could fund a modest retirement. Whatever the reasons, saving for life in retirement hasn’t been easy for those who have already retired, or will do so in the near future.
For women the struggle to save enough for retirement has been even greater. Time out to raise a family, part-time and piecemeal employment and the ever-present pay gap mean that women simply can’t fund their own retirement through super. And while younger generations have longer to save, the gender pay inequality will have a lasting impact. Earning $700,000 less over their lifetime less than male counterparts results in $64,750 less in employer super contributions (based on 9.25 per cent) for women. And this doesn’t take into consideration the lost compound returns this money would generate in a super fund.
An extra $500 in super per year for female staff may not make them rich at retirement, but it will give women slightly more options than they have currently. And if other larger employers follow suit, it will go a little way to bridge the gap.
In a financial landscape where the resources for free, qualified financial advice are scarce, the move by ANZ to help women with less than $50,000 in superannuation should be applauded – with a little reservation. While it’s often said it’s better to do something than nothing, it’s worth bearing in mind that ANZ does have a vested interest in the growing superannuation and financial services sector. And while its planners and advisors have a duty to provide information that is in the best interest of customers, I can’t see them recommending products from non-ANZ providers. But hey, I could be wrong.
If offered, would you take free advice from any bank? Is it fair that only female staff will receive the extra $500 per year?