How the gender pay gap is causing problems for Aussie women: Now and in the future

Women are entering retirement with significantly less superannuation and personal savings than men – leading to a growing class of women living out their golden years in poverty. We explore how the gender pay gap is adding to this growing epidemic.

While most people have heard of the ‘gender pay gap’ (GPG), many of us are less familiar with the impact it has on both individuals, and, our society as a whole.

So what is the gender pay gap?

In Australia, the gender pay gap is calculated by the WGEA using ABS earnings data. It’s a measure of “the difference between the average earnings of women and men in the workforce”.

It’s not the same as ‘equal pay’, which means men and women being paid the same amount “for work of equal or comparable value” (although that is a known contributor to the GPG).

So for example, in November 2020, women working full-time earnt $1562 on average, compared with men, who earnt $1804.20. That puts the national gender pay gap at 13.4 per cent.

How does it affect women’s financial security?

The gender pay gap doesn’t just affect your weekly take-home pay. It has far reaching consequences for women’s (and children’s) financial security over a lifetime.

One of the easiest places to see the impact is on superannuation. Women retire with 47 per cent less super than men, yet live five years longer on average.

Consider also the impact it has on a woman’s ability to support a family following divorce or separation. There’s a million single-parent families in Australia, and 81.6 per cent of them are headed by women. Financially speaking, they’re one of the most disadvantaged groups in the country.

37 per cent of single-parent families headed by women live in poverty. They battle poverty at twice the rate of single-parent families headed by a man and earn around half the weekly median income compared with all households.

Poverty like this has broad implications for the community as a whole. Those who grow up in poverty have worse health, education and social outcomes than their peers, as well as higher rates of unemployment and lower earnings when they do enter the workforce – contributing to nationally lower levels of productivity.

So what to do?

The gender pay gap is a social and economic issue that has long been pervasive in Australia. While the level has fluctuated over the last 20-years, it hasn’t really improved, despite greater awareness of the issue.

While it’s important to keep up pressure at all levels – there’s much that business and political leaders can do – women need to focus on their own financial wellbeing and take action to minimise the impact on them personally.

That means having proper planning, investment and protection strategies in place, including:


  • Start making voluntary contributions as early as you can, to help offset the impact of any career breaks.
  • Get your super settings right. Speak to a financial professional for advice on the level of risk and investments types that are right for you.
  • If you have a partner, look into super contribution splitting and the super tax offset for contributions on behalf of your spouse.


  • Make sure you have the right level of life insurance, total and permanent disability insurance (TPD) and income protection insurance in place, in case something unexpected should happen.


  • Aim to build up your emergency savings fund, so that you have at least three months’ worth of living expenses readily available.

Given that COVID-19 has been shown to disproportionately affect women’s employment and incomes, the issue of financial equality is more relevant now than ever.

Source: FPA Money & Life