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New Zealand Women's Retirement Challenge: Less Money, Longer Lives

Updated: 5 days ago

Good news, ladies! Women in New Zealand typically enjoy longer lives than men, giving them more time to relish retirement. However, there's a catch: many women have less money saved for those extra years.

Women generally earn less, save less, and face greater financial pressures. Despite progress being made over the years, there's still a notable financial imbalance. In 2019, the gender pay gap was 9.3%, meaning women earned about $12,000 less annually than men. Although this is a vast improvement from the more than 16% pay gap back in 1998, our progress has been somewhat stunted since 2017. 

Efforts have been made to investigate causes of the gender pay gap, in hopes to understand these issues better. The causes are complex to say the least, with 20% of the current gender pay gap being explained by differences in education, occupations and the industries that men and women work in. One can only wonder if more men occupied traditionally female industries… Would the pay gap still exist? 

So what about the other 80%? Well this large portion is driven by what researchers now call “unexplained factors”. These factors include conscious and unconscious bias and differences in choices and behaviours. To read more about this, read this article by the Ministry for Women

The Pay Gap and Its Impact on women's retirement

As mentioned, women often work in lower-paid jobs and take time off for caregiving, which affects both their earnings and savings, including KiwiSaver contributions. Many stop contributing to KiwiSaver when they have children, further widening the gap. 

scrabble tiles spelling out "we are having a baby".

Retirement Commissioner Jane Wrightson explains that working in lower-paid sectors and taking time off for caregiving puts women in a position where they earn less than men. This leads to lower KiwiSaver balances and less financial security in retirement.  

The Gender Pay Gap in the Workplace

David McLean from Westpac highlights the pay disparity within his organisation. While men and women are paid equally for the same work, a 30.3% gender pay gap exists because women are more represented in lower-paid positions. Westpac aims to close this gap by increasing the proportion of women in top management to 50% by 2025. This is a bold target seeing as much of the pay gap is caused by bias and behaviours, a change in culture would be required to see this gap close. We can only hope that Westpac realises this goal so they can blaze the way for other companies to follow.  

There has also been an ongoing understanding that women are less likely to negotiate for higher pay. Bestselling business memoirs like Sheryl Sandberg’s “Lean In” and in previous studies like the research-based “Women Don’t Ask” by Linda Babcock and Sara Laschever suggested that a large contribution to the gender pay gap was because fewer women negotiated their salaries. But disappointingly, more recent research published in the Harvard Business Review found that women ‘do’ ask as often as men but they just don’t ‘get’. 

KiwiSaver and Retirement Savings

We can strongly advise young women to get their KiwiSaver sorted early. And although this is sound advice for all young people, unfortunately women’s KiwiSaver balances are lower than men’s across all age groups, not just the younger demographics. ANZ data shows that women aged 45-54 have balances almost a quarter lower than men’s. Many women stop contributions when they have children, take time off to care for ageing family members or take on any other unpaid labour, impacting their long-term savings.

Employers like ANZ and Westpac continue to pay their contributions for employees on parental leave. Wrightson suggests a "care credit" for KiwiSaver to help those out of the workforce due to family commitments.

mother lying on the floor with her baby having fun.

Financial Independence and Planning

Due to an obvious historical disadvantage, women have not always had the same access to financial education and planning as their male counterparts. And growing up in households where our mothers were left out of financial decision making has resulted in a lack of confidence being passed down the generations

Having open conversations about money within relationships and families is essential. Women should not be afraid to advocate for themselves and maintain their own savings alongside joint funds. Parents should also include financial education for all children in the family, regardless of gender. 

Blair Vernon from AMP New Zealand Wealth Management stresses the importance of women feeling a sense of control over their finances. This involves setting up KiwiSaver accounts to suit personal goals and being transparent about household finances. AMP New Zealand Wealth Management have some great tips on how to start conversations about finances with your significant other. Watch it here.

Investing Style and Risk Aversion

Women tend to be more conservative investors and more risk averse, which can impact their long-term returns. ANZ data shows that higher percentages of women are in conservative KiwiSaver funds, which have a lower projected return due to the nature of the holdings. We can only help women maximise their finances if we first understand why women tend to be more conservative. Research suggests that women focus more on the ‘pain’ associated with loss and the potential impacts on the wider family compared to men. Women also held less optimism regarding the probability of favourable financial outcomes and will naturally evaluate a given gamble as being riskier. We don’t need to look far back to understand how these feelings of vulnerability developed. 

Despite this, Retirement Commissioner Jane Wrightson notes that women’s cautious approach to investing can sometimes be beneficial, as they tend to avoid poor stocks and hold onto good ones longer.

Life Events and Financial Stability

Life events like childbirth and relationship breakdowns often impact women more than men. Women are more likely to stop working to look after children and, when they return, earn less. Stats NZ data shows that mothers earn 17% less than fathers.

In cases of separation, women with children experience a 19% fall in income, while men often fare better financially. Women also face ageism when seeking employment, although older women in jobs are often underestimated.

Building Confidence and Financial Literacy

Financial coach Hannah McQueen points out that women receive less helpful financial messages, often focusing on spending less rather than investing. Women need to build confidence in managing their finances, as capability is not the issue.

McQueen encourages women to take responsibility for their finances and advocate for themselves. Educational efforts and mindset changes are crucial for empowering women to make necessary financial changes.


New Zealand women, women all over the world, face significant challenges in achieving financial security for retirement. By addressing the gender pay gap, encouraging self advocacy in finances, providing equal access to financial education, encouraging better financial planning and investment strategies, and fostering confidence, women can improve their financial futures and enjoy a secure retirement.

At Naked Finance, we want to see all Kiwis develop and grow their financial confidence. Everyone deserves a good financial education and tailored advice to suit your goals and ambitions. We want to encourage more women to take charge of their finances and welcome you to reach out to our team to chat more. 

If you want to improve your financial literacy or need some advice about your KiwiSaver, contact the Naked Finance team today.

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