COVID-19 – a super adversity for women Sep 23, 2020
Women are facing significant challenges as a result of COVID-19 and may have to work even harder than men to recover from this crisis.
Statistics show that women have experienced more job losses and wage reduction than men1. This could be the result of women having a higher representation in crisis-affected sectors, such as retail, hospitality and childcare. Many of these sectors have been shutdown, put on hold or just rendered unnecessary by stay-at-home orders as we all work to drive infection rates down.
Women also make up the majority of healthcare workers in Australia2, and are at a higher risk of being exposed to the virus. By extension, this means more women are likely to take time off due to isolation and quarantine requirements.
Prior to the pandemic, women were already at a disadvantage from a superannuation perspective, due to the ongoing gender pay gap3 and a higher frequency of sacrificing their career for family duties4.
Unfortunately, women’s superannuation has been another gender-driven casualty of the pandemic.
Job losses means reduced super contributions, so not only have women’s incomes been hit by COVID-19, their retirement savings have been impacted too. And on average, women withdrew more from their super under early release than their male counterparts5.
A super withdrawal of up to $20,000 under the Government’s early release scheme could have long-reaching impacts on women’s retirement outcomes – not least the loss in compound interest. For a 25-year-old, this amount could have grown to $47,000 in today’s dollars by the time they retire.
Given women’s balances are already almost $50,000 lower than men1, the pandemic is only going to widen this gap unless action is taken as soon as possible.
Recovery strategies worth looking into
There are a variety of avenues available to help women recover lost savings and catch up their balance, even if finances are still being affected by COVID-19.
- Contribution splitting and spouse contributions
If your income has been significantly reduced after COVID-19, but your partners’ has not, it may be worth looking into spouse contributions to even out retirement balances and potentially reduce your household tax.
- Extra super contributions
Even contributing small amounts to super whenever you can afford to can make a huge difference to your savings. Your extra contributions could help you become eligible to receive some extra super money from the Government, such as the Government co-contribution or the Low Income Superannuation Tax Offset.
- Automatic savings tools
Intrust Super’s contribution app, SuperCents, can help you build your savings automatically by contributing your spare change from your everyday purchases. These small contributions could also help you become eligible for Government bonuses and tax incentives.
- Free online financial advice
You can review your financial situation and learn more about how you’re tracking for your retirement with our online financial advice service, Super Blueprint.
- In-person financial advice
Tailored personal advice is available if you would like further information about improving your financial situation. You can call the financial advisers at Intrust360° on 1300 001 360 or book an appointment online.