Pay gap implications for retirement

New research which highlights the gender pay gap is concerning given the ramifications for retirement.

New Zealand reportedly has one of the smaller gender pay gaps in the OECD, our society provides equal educational opportunities, and there are an increasing number of women in the workforce compared with decades gone by.

But there is still inequality at many levels and in many fields.

Wider access to education and changing attitudes have been a boon for women, but that has also increased the numbers of people competing for jobs. Many women also take time out of the workforce to raise children, which can distort natural career paths.

All of this means women often work in lower paid, lower skilled jobs with fewer prospects. They are less likely to become managers than men, and even when they do reach higher levels they are paid less than men.

An ANZ report released last week highlighted the disparities.

Its figures showed New Zealand women earned an average $300 less per week than men in 2014. Over a lifetime, this equated to $608,000 less than men.

The gap has serious ramifications in terms of women's ability to save for their retirement, especially as they are likely to stop contributing to retirement savings schemes while raising children.

The figures show women are forecast to retire with an average of $59,000 less than men - $144,000 compared with $203,000. Women live longer than men and can be expected to have an average retirement of 20 years, compared with 14 years for men.

The problem cannot be ignored - particularly within the broader issue of retirement funds, which looms as a significant predicament. Our declining birth rate means the country's smaller working age population will shoulder an increasing burden, exacerbated by health costs associated with an ageing society.

Both current Retirement Commissioner Diane Maxwell and previous commissioner Diana Crossan have been critical of the Government's inaction over the retirement age.

Ms Crossan first recommended in 2006 that the age of superannuation entitlement be raised from 65 to 67, starting in 2020, to ease pressures on superannuation lest other spending cuts be necessary to pay for it.

Financial advisers and the Treasury have made similar warnings. Prime Minister John Key has continually refused to change the retirement age under his watch.

The current housing crisis is exacerbating the problem. Homeowners are being forced to take out huge mortgages, which they are unable to pay off before they retire.

As the number of have nots increases, and so many people - increasingly those on middle incomes, too - struggle to make ends meet every day, consideration of retirement savings is impossible.

Courage and cross party collaboration by our leaders is required to face up to all facets of the looming problem - now, not later.

And another thing

It is no small achievement that Wellington author Anna Smaill's dystopian novel The Chimes has been longlisted for this year's prestigious Man Booker Prize, which is regarded as the premier award for literary fiction written in English.

Smaill's novel is one of the 13 works chosen from a pool of 156. If she makes the shortlist (to be announced in mid September) she will be in the running for literary fame and fortune - a prize worth $118,000 (£50,000), and the massive flow on effect of book sales.

Just being named on the longlist is impressive, however. This is only the second year in which the prize has been open to writers of any nationality. Previously, it was only open to authors from the UK and the Commonwealth, the Republic of Ireland and Zimbabwe.

Smaill can be justifiably proud, and New Zealand has a chance once again to bask in the international literary spotlight.

A literary trifecta (in the wake of Eleanor Catton's 2013 win for The Luminaries and Keri Hulme's 1985 win for The Bone People) seems tantalisingly within reach.

 

 

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