Women's KiwiSaver balances are still 25% lower than men’s

Personal Finance / news

No improvement to gender savings gap when it comes to KiwiSaver balances, says Retirement Commission as new research finds men have 25% more than women in their KiwiSaver on average

22nd May 24, 2:36pm by Ella Somers

In a new report, Te Ara Ahunga Ora Retirement Commission says the gender savings gap isn’t closing and there’s still a 25% disparity between the KiwiSaver balances of women and men.

This is the third year in a row that the commission has hired actuaries Melville Jessup Weaver (MJW) to conduct research on KiwiSaver balances.

KiwiSaver providers, covering 3,274,618 members with total balances of $104.21 billion, responded to MJW's data request for the report.

According to Inland Revenue (IRD), there were 3,335,323 total KiwiSaver members as of December 2023, meaning the survey covered about 98% of the member base.

The research found that the average KiwiSaver balance increased by $4,444 or 16.2% last year to $31,823, which the Commission said reflected “the strong recovery financial market experienced over 2023”.

Despite that growth, the Commission said 38% of KiwiSaver members had balances below $10,000 at the end of 2023 and two thirds of people with balances less than $10,000 are 35 and under.

Less than 10% of KiwiSaver members have a balance over $80,000 and more males than women had balances above $80,000 across almost all age brackets.

The MJW report found there were significantly more women than men with balances under $10,000 across almost all age brackets.

Notable gender disparity still remains across the average amount in KiwiSaver balances as well. MJW found men were holding 25% more in their accounts than women, a gap that translates to a difference of $7,314.

“Many members continue to have lower KiwiSaver balances than we’d like to see, and that’s both men and women. We know that the cost-of-living pressures many are facing will be contributing to this,” Te Ara Ahunga Ora Policy Lead Michelle Reyers said.

“However, lower KiwiSaver balances have a significant impact, particularly on women who need to fund their retirement for longer.”

The average man’s KiwiSaver balance was found to be $36,605, while the average woman’s KiwiSaver balance was $29,291.

The gender savings gap was sitting at 20% in 2021 and grew to 25% by 2022. It didn’t budge from the 25% mark in 2023.

Reyers said it was disappointing no progress had been made to improve the gender gap on retirement savings but it was good to see the gender savings gap hadn’t “widened” in the past year.

The widest gender savings gap remains between women and men in their 40s and 50s.

The report found on average, women in their 40s have approximately $11,000 or 32% less in their KiwiSavers than men, while women in their 50s have approximately $17,000 or 36% less in their KiwiSaver balances than men.

The Commission said this disparity was likely a result from the gender pay gap, time taken out of paid work, and the higher percentage of women working part-time compared to men.

This research follows on from findings the Commission revealed in April around the gender gap in KiwiSaver yearly contributions.

The Commission reported a 36% difference in the yearly contributions that men and women put into KiwiSaver – even though they contribute the same percentage of their salaries on average.

The research found that because women are often in part-time jobs and take on unpaid caregiving roles, this widens the KiwiSaver contribution gap further.

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29 Comments

by interesting1234 | 22nd May 24, 3:01pm 1716346868

The report found on average, women in their 40s have approximately $11,000 or 32% less in their KiwiSavers than men, while women in their 50s have approximately $17,000 or 36% less in their KiwiSaver balances than men.

"Know this first: The law makes it clear- any contributions made to your KiwiSaver during your relationship is, by definition, "relationship property". This means it must be split equally under the Property (Relationships) Act."

Link: https://www.moneyhub.co.nz/what-happens-to-kiwisaver-in-a-divorce-or-separation.html

I believe this negates any significance of this matter then given whatever they do not contribute, they have half of their partners by right, unless a relationship splits after having children and she stays single for the rest of her life without ever finding a de facto partner. Seems insignificant in the grander scheme of things.

by pacifica | 22nd May 24, 11:52pm 1716378733

Only if you consider every woman must be partnered to a man, otherwise more equitable wages for equal work is in order. There are a lot of single ladies and single men out there who will not have partner relationships to lean on. Perhaps to ensure your theory logically holds that it "negates any significance of this matter " you can convince all those single people to partner up using the argument above.

by interesting1234 | 23rd May 24, 7:48am 1716407329

Please read my comment in detail, or perhaps I need to explain it seeing you haven't. I said "de facto partner" for a reason which doesn't entail any gender or sex, and noted it negates the significance of the matter given the legal framework to disperse relationship property. You seem to have a propensity to take things personally. Try stepping back and pondering as not everything written is intended to offend or provoke a reaction, more so to provoke thought and reflection. Responses to comments here can be seen as which of the two have been implemented.

by David6766 | 23rd May 24, 10:03am 1716415428

This highlights a key aspect that is missed in the gender pay discussion.

Transfers between genders are ignored, so a female working on reduced hours to support children with their lifestyle maintained at an equivalent level of their male partner will add to the gender pay/wealth gap but in reality their life is equitable.

Interestingly the kiwisaver data may further highlight this. The 40 to 50 age range is where, I would suggest, many conventional relationships end and upon separation of relationship property I expectthe female partner is unlikely to put a chunk of funds into Kiwisaver. So a shared $60k ($40K M/$20k F) relationship property kiwisaver balance becomes a $40k male balance, $20k female balance and $10k in her bank account.

by interesting1234 | 23rd May 24, 11:09am 1716419365

upon separation of relationship property I expect the female partner is unlikely to put a chunk of funds into Kiwisaver. So a shared $60k ($40K M/$20k F) relationship property kiwisaver balance becomes a $40k male balance, $20k female balance and $10k in her bank account.

Could you elaborate on this further please? For example divorce, and let's assume straight forward split with no excessive lawyers fees, would split the total kiwisaver between, would they not be required to put the funds into kiwisaver thus negating the ability to bank the $10k? If not then this seems a large flaw in the system.

by the good oil | 22nd May 24, 3:23pm 1716348212

"Less than 10% of KiwiSaver members have a balance over $80,000..."

Which is a good news story.

The 90% will be less disappointed when the Ponzi of promises collapses

by stjohn | 22nd May 24, 4:50pm 1716353438

Horrible news story.

Superannuation in NZ is going to cost $49 billion a year by 2041.. That's only 17 years away. It currently costs us just shy of $20 billion a year ( NZ gets about $150 billion revenue/year currently, so is about 15% of our income..). Our superannuation fund is only circa $80 billion, so will run out fairly soon and will become unaffordable relatively quickly.

The sooner we get KS to the same levels of the Aus scheme the better. No withdrawal for a house. Compulsary and higher employer contributions so that in 20-30-40years kiwis retiring can actually have a decent quality of life. The pension won't be around in it's current form as we know it because it won't be affordable, and the power of compounding needs as much time as possible to ensure kiwis can be as wealthy as possible to withstand the change that is needed.

Not sure what you allude to by ponzi of promises, care to explain?

by Uninterested | 22nd May 24, 5:43pm 1716356617

Translation: 'means testing of Kiwisaver'.

Which means that a low-ish balance and other external 'investments' could very well be a smart move.

by WellingtonInvestor | 22nd May 24, 6:13pm 1716358429

Slow train crash. But if NZ actually increased peoples wages and productivity to increase NZs wealth, instead of relying on cheap imported labour, we would be in a far better situation.

We need to income test super. Anyone earning very good wages, and who have millions in the bank shouldn't be getting super on top. It wasn't designed for that.

by JohnTrz | 22nd May 24, 7:18pm 1716362310

Surely, to ensure that everyone on reaching retirement age gets enough each week to pay the rent and live, fairness demands that the saving be done not by individuals, who cannot all save equally, but by the state through raising taxation to increase investment in the NZ Superannuation Fund for the pot to be big enough to pay everyone, equally, enough to survive on with dignity. That will also require bringing back some form of the surtax or surcharge abolished in 1998, to ensure that although NZ Super must remain universal, only those who need it will be tempted to apply for it.

In effect, this would mean compulsory super contributions from every income-earner according to his or her ability, disbursed in time to every retiree according to his or her need.

by IT GUY | 22nd May 24, 8:22pm 1716366169

Most people over their working life at 10% compulsary into super would save enough...... to live out retirement, maybe from 67...

some may not work, they will get less.... but should get a minimum basic allowance.

Communism have solved this, its called universal poverty

by pacifica | 22nd May 24, 11:55pm 1716378937

Yet over 40% of people would have nothing in their accounts even with 10% because 10% of nothing is nothing. I am surprised you don't know that those with no income would have nothing in the accounts even with a 10% contribution rate... seems like a massive lack in basic mathematics education there. That is a fricken huge percent of the population to be blind to.

by In Vino Veritas | 23rd May 24, 2:20am 1716387634

“Fairness demands”. Fairness demands nothing. Life is unfair. Get used to it. No one has any right to fairness or dignity so please don’t make out that they do. Your post could have come straight from the communist manifesto.

by interesting1234 | 23rd May 24, 7:52am 1716407523

Yes life is unfair, which is what many will feel when either the retirement age gets raised or it gets means tested which it will eventually have to do to become sustainable long term. That or it will implode, then everyone will cry foul

by alphabeatrium | 22nd May 24, 5:17pm 1716355032

Of the three stated explanations ("gender pay gap, time taken out of paid work, and the higher percentage of women working part-time compared to men"), the latter two are the most obvious, but also not really of much concern? We all know women are more likely to take this time off than men. This is due to both biological factors (i.e. the physical demands of child rearing) and gender (if one parent stays at home, it's the one earning less, which means it's usually the woman in the equation). Yet anything that the man puts into this KiwiSaver is also clearly "relationship property". So you can't really discount that and say that women's balances are lower, when they likely have a claim to their partner's balances. Indeed in my own case my balance is much higher than my wife (a homemaker), but it will be used to fund our shared retirement.

by Uninterested | 22nd May 24, 5:45pm 1716356732

In future it may well be that men put less away because the feminisation of education favours women.

by pacifica | 23rd May 24, 12:00am 1716379223

Also the partner relationships argument goes both ways as it is split regardless of what gender the earners are. <- just to help you realize that same sex couples exist as well. While same sex couples also have the same logic of getting the lower paid one to take over most unpaid carer work it would not explain the pay discrepancies between genders overall. Most working people do not have children under 10 at home.

by 1harlow1 | 23rd May 24, 7:31am 1716406271

Equal pay for equal work is already law. The reasons behind the gender pay gap are widely documented if you look outside of feminist propoganda.

More time off work due to child raising being the main one, followed by choice of profession at the fringes, which leads to a gap on aggregate.

This obviously directly translates to less retirement savings..

by alphabeatrium | 23rd May 24, 12:13pm 1716423198

I know it makes people uncofmortable, but rather than having to list every type of relationship type, I prefer to be terse and "heteronormative" by simply shortcutting to the most common relationship type. But you raise a good point, in that the data doesn't seem to even support either of our suggested analyses. Can the data actually be limited to single people? It's easy but superficial to consider individual KiwiSaver balances by sex, but not to then consider the myriad types of relationship that exist in practice.

by WellingtonInvestor | 22nd May 24, 6:12pm 1716358346

Didn't National stop payments into the Cullen fund for about 9 years which could have strengthened universal super for everyone.

by Grattaway | 22nd May 24, 7:41pm 1716363671

Laugh a minute - so the govt should keep borrowing to put into a savings scheme!!

and if this is such a great idea they might as well borrow a couple of hundred billion and invest that

or we could do it ourselves so the majority can look after themselves in their retirement

by IT GUY | 22nd May 24, 8:24pm 1716366269

A leveraged super scheme, what could go wrong?

maybe we could put experts like Robbo and Orr in charge of it....

by Colonial Viper | 22nd May 24, 9:50pm 1716371400

Laugh a minute - so the govt should keep borrowing to put into a savings scheme!!

Borrow at a cost of 2% pa. Reap returns of 5% to 10% pa in global markets. Is there something about this that you do not understand?

by pacifica | 23rd May 24, 12:40am 1716381620

You could start with them not grasping the mathematics of it and then try to explain to them the essentials of housing investment and why those with houses can also leverage the equity & debt to become wealthier then their counterparts. As the concept is more absent in the latest generations.

by goldni | 22nd May 24, 8:55pm 1716368110

I can not find any reference to the common hypothesis that Women might be more risk averse when investing, likely including KiwiSaver. If many more Wahinis are in Cash and Conservative funds with more Men in Growth funds this over time is going to increase differences in balances.

I'm not writing off the well documented income gap (maternity/ child raising etc) but think this would have been relevant of comment.

https://hbr.org/2020/12/how-the-gender-balance-of-investment-teams-shap…

by Colonial Viper | 22nd May 24, 9:51pm 1716371494

I'm not writing off the well documented income gap (maternity/ child raising etc)

This is a work gap, not an income gap. Like the fact that women, on average, choose to work fewer hours a week than men do.

by pacifica | 23rd May 24, 12:32am 1716381166

Er no this is also a wage gap. I know several companies paying the female employees 20-50% less even though they work longer hours (in that they are at work on time and have shorter breaks) performing more skilled work and providing more productive outcomes for the companies... some of those companies just lost a few massive ERA cases and had much of their engineering staff poached (mostly female but many of the males followed them too ;) we can all leave a sinking ship ) as it is easy when they would get an effective 20-40% pay rise straight away. One of the companies would not even tell the female staff when they won awards for being the best in Australasia in contrast to the treatment of male colleagues who did not perform or come even close. Quite a few I was pretty stunned to work alongside; I love hyper smart colleagues with more intent on the work then on ego shipping (way too many male designers in the later category who did really awful work and were throwing spanners into the gears of production a lot just so they could be praised constantly, we all know the type).

The ERA cases had other tasty tidbits of NZ employer bad behavior including cancelling a 2 day bereavement leave on the day of the viewing & funeral etc which would be taken by all genders of employees given the same situation (well unless they really hated their parents, and I mean beyond hatred disavow knowledge of parents, as any responsible person would take self care leave around parent or child bereavement). Oh then there was the constructive dismissal of the male organ transplant employee by employers intentionally trying to get them infected with covid in the office, coming up just to cough on them repeatedly while claiming they were sick... oh fun times to be had in NZ tech companies I can tell you.

But yeah the wage gap is massive and for some would amount to a near 30% pay increase if the pay equity was enacted, (40% including costs of work being covered). The pay equity for many employee categories was intentionally delayed by Labour to the point they killed the cases that the employees had won back in 2017 with a 6 year delay before driving it off a cliff. So yeah it is more about the wage inequity then about "parental" leave (which applies regardless of gender and accommodates single sex partnerships as well).

by interesting1234 | 23rd May 24, 8:32am 1716409922

I know several companies paying the female employees 20-50% less even though they work longer hours

I call bollocks on this, claiming a company pays all female employees 20-50% less implies you; 1./ know all of the staff salaries or hourly wages across all roles and 2./ have some form of proof that they are paid less due to their gender. Ridiculous.

If one person, be it man or women has greater credentials, experience and the key factor negotiation skills then they are more likely to achieve a greater pay rate. The number of people out there who take the 1st offer from a company is mindboggling. Anyone who values themselves will know their worth and negotiate, being willing to walk away from a job if they aren't coming to an amicable contracted rate/salary. My wife has frequently worked in roles with a greater salary than me and she negotiates well. I see no reason why anyone else is incapable of doing the same.

by David6766 | 23rd May 24, 10:16am 1716416177

So female staff treated unfairly and leave to other employers who benefit and probably outperform the original company, the market working as intended.

Those that remain at the original employer sit and complain about the unfairness, maintaining the false narrative.