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The Investing Gap

Women’s KiwiSaver balances are 28 per cent lower than men’s, ANZ research suggests.
There are more women enrolled in KiwiSaver than men, but these accounts are more likely to be in conservative
and low-risk fund types, the bank says. This means their returns are probably less than men’s.
According to Financial Markets Authority research, women are also less likely to have financial investments outside
of KiwiSaver.
This might be because women are less confident and rate their level of finance knowledge lower than men.

Research tells us that when women do invest at appropriate risk levels, they tend to do better than their male
counterparts.

Motherhood Sets women back

If you’re a mother, you likely took a year off. Or if you’re from the older generation, you might have taken 10 years
off.
Research last year by the Ministry of Women shows you are probably disadvantaged by that. Women’s hourly
wages drop on average 4.4 per cent after they have a child. If a mother takes longer than a year to get back to work,
the decrease is higher still, at 8.3 per cent.

The ministry say there could be several reasons for this:
• It could be “depreciation of human capital while on maternity leave”.
• Mothers could be more likely to trade higher wages for flexible working hours.

• They may suffer reduced bargaining power after they re-enter the workforce

Relationship Break-ups

Both partners suffer financially after a divorce or if their relationship breaks down. However, women can often find
themselves on the back foot financially for longer.
If the woman has taken time out of the workplace for motherhood, her retirement savings, like KiwiSaver, could be
significantly less.
She might be paid out by her partner to cover loss of earnings, but she could still end up worse off financially.
Perhaps she’ll need to buy another house in a worse area, or may be reduced to renting.

And, if her partner was the main breadwinner of the house, she might have given up her career to support the
household. She might even have been semi or fully retired, but need to start working again.

Women are wise to prepare for any and all eventualities, including separation, divorce, or even the death of their
partner, because many women end up financially disadvantaged after a relationship ends.

How Women can bridge the Gap

• Start thinking about your retirement now. What lifestyle do you dream of after your stop work?

• Think about how much you’re spending and calculate a ball-park figure of what you’ll have at 65. Take steps
early to ensure you reach your retirement goals, but keep in mind that exact planning is near-impossible.
• Sort out your KiwiSaver account. Check you’re in a fund that’s suited to your life stage & how comfortable
you are taking risks. More aggressive funds might earn better returns, but come with higher risk.
• Try to contribute more to KiwiSaver. Do some calculations and, provided you can afford it, see if you can put
more into your KiwiSaver account, or other retirement savings. The more you put in now, the easier things
could be later in life.

See more..