Retirement Commission reports 25% gender gap in KiwiSaver balances, with women lagging behind men across most age groups

The Retirement Commission says the average KiwiSaver gender retirement savings gap remains at 25%.

The Commission released a new report on Monday, which found that women continue to have lower average balances than men across all groups – except those aged over 80.

The gap is widest between women and men in their 40s, 50s and 60s. The Commission said on average, men in their 40s have about 30% or $12,000 more invested in KiwiSaver than women, while men in their 50s have about 36%, or $20,000 more. 

Men aged between 61 and 65 have approximately 36% or $21,500 more than women in that age bracket do.

“In almost all age groups, women are overrepresented among those with low balances and men are overrepresented among those with the highest balances,” the Commission said.

Currently, there are more female members than male members in KiwiSaver, with female members accounting for 51% and male members accounting for 49% of membership.

The Commission said the average KiwiSaver balance is $37,079, up 16.5% from the previous year.

However, while the average balance for a male KiwiSaver member is currently sitting at $42,664, the average balance for a female KiwiSaver member is at $34,185, a difference of $8,479.

The Commission’s policy lead Michelle Reyers said even though the gender pay gap which is at 8.2% as of June 2024 is trending downwards, that’s not being reflected in the average gender KiwiSaver retirement savings gap. 

“The impact of compounding interest on balances informs some of this, as money invested earlier has time to grow, but if women’s balances are lower than men’s in younger life, they will likely remain lower,” she said.

“It tells us that at an age when many women may be returning to the full-time paid workforce after years of unpaid caregiving and necessary part-time work, the effect comes more starkly into focus.”

$121.8 billion

The Commission hired actuaries Melville Jessup Weaver (MJW) to collect comprehensive data about KiwiSaver balances across age groups and gender. 

This is the fourth report in the series, with the first edition being released in 2021.

The report contains data on 3.2 million KiwiSaver members with total balances of $121.8 billion as of the end of December 2024, representing approximately 97% of the total KiwiSaver member base.

There were approximately 3,381,547 KiwiSaver members with total balances of $121.9 billion at the end of 2024.

MJW approached KiwiSaver providers for this data and said three providers declined to participate in the latest report.

In the actuaries analysis, MJW found the KiwiSaver age bracket with the most members was those in the 18–25 years cohort.

MJW said that there were “significantly more” women than men in the $0 to $10,000 KiwiSaver balance cohort in almost all age cohorts. There were also more men than women in the $80,000 plus cohort for almost all age brackets.

MJW found that approximately 5.8% or 190,000 members are aged over 65, and use KiwiSaver as an “investment vehicle” in their retirement. 

This is an increase from that cohort in the 2023 report where 5.5% or 180,000 KiwiSaver members over the age of 65 were doing this.

Increase the default rate

Retirement Commissioner Jane Wrightson said the unchanged KiwiSaver retirement savings gap is one of several reasons why the Commission wants people to contribute more to their KiwiSaver.

“Thanks to the gender pay gap and other factors, women tend to earn less, which leads to saving less. Women tend to spend longer periods in unpaid work, and get hit harder by life shocks like unemployment and divorce,” she said.

Wrightson called again for the default KiwiSaver contribution rate to be lifted from 3% to 4% and for employers to match it at that 4% level or more.

“KiwiSaver has been instrumental in promoting retirement savings in New Zealand, but it’s not working as well as it could for everyone,” she said.

“Changes made to the settings now will improve outcomes for all who contribute, and since women live longer on average than men and therefore have longer retirement periods to fund, for this demographic, a rethink is especially critical.”