The Gender Pension Gap: Why Women Are More Likely To Retire With Far Less Money

In partnership with BNZ

We want to highlight the gender pension gap; an important issue that doesn’t get enough attention yet will affect many women heading into retirement. Women are more likely to retire with significantly less money than men at a time of life when there is little they can do about it. We talked to two financial experts on how we can all look after our future financial selves, starting today.

We all know the ins and outs of the gender pay gap, and how unfair that is. But what we don’t spend a lot of time thinking about is the how cumulative effect of all that missed money actually affects us in the long run. The statistics of just how badly off many women are as they hit retirement age are very stark.

– In Aotearoa, by the time women hit ages 55-64, their KiwiSaver balances are, on average, almost a quarter lower than the balances of men of the same age, even though the government savings initiative started in 2007.

– Prior to Covid, almost 16% of women across the OECD were living in poverty, alongside 10% of men.

– Ethnicity plays a huge part in the pay gap. According to StatsNZ, the Pākehā gender pay gap in NZ is 9.1%, but for wāhine Māori it’s 14%. For Pasifika women, it’s a whopping 20% difference when compared to the average pākehā men’s salary.

– Globally, retirement-aged women are the fastest growing demographic in poverty statistics.

What Is Behind The Gender Pension Gap?

The causes of the gender pension gap are varied and hard to pin down, but there are some key factors, says Pippa Hogg, a Financial Adviser at BNZ. “Overall, women are still unfortunately paid less than men, which means as they make contributions to KiwiSaver or other pensions, those contributions are lower. Women are more likely to take time out of the workforce for various reasons, it might be maternity leave, to raise children or they might leave the workforce earlier to look after elderly family members, or grandchildren. What that means is that they have fewer working years to contribute to the pension, and then when they do return to work, because women value flexibility in the workforce, they’re seeking part-time roles and they might be overlooked for promotions because of that.”

“To close the gender pension gap you need to close the knowledge gap.”

All of this takes on a greater impact when you realise that not only do women earn less while they’re working, they’re more likely to out-live their male partners – so they need their retirements savings for a longer period of time. “In an ideal world we’d actually reach pension age with about 5-7% more in our pension, because we tend to live longer.”

It makes for very sobering reading to realise how serious and how long-term the effects of the gender pension gap are, which is why being armed with the facts means you can make different choices in your life and career. As Victoria Harris, Head of Finance at The Curve, an investing education platform for women puts it: “To close the gender pension gap you need to close the knowledge gap.”

The Five Lessons To Get Financial Freedom For Future You

Lesson # 1: Stop Being Embarrassed To Talk About Your Money

“Women are really good at talking to each other about lots of topics, so why don’t we talk more about our finances with each other?” says Pippa. “Your peers are likely to be in a similar spot to you, financially, and experience the same concerns or questions. Having that open dialogue with family and friends, or trusted advisors, is really important to understanding the options that are available to you.”  

The idea that women shouldn’t talk about money might also be a stopover to the idea that women don’t understand money, as well. “When we started The Curve, a friend of mine said ‘My dad would also discuss investing and business and money with my brothers, but never thought that I would be interested,’” Victoria says. “And then when you get those cycles, it’s hard to break out of that.”

Lesson #2: Don’t Ignore Your Future Self

It can be really easy when you’re in your 20s or 30s to focus on the here and now, rather than ‘saving away for a rainy day’, as we’re so often told. It’s even easier to only be able to focus on the here and now when you’re not earning much money and, well, every day feels like a rainy day.

That’s when the idea of starting small is absolutely key – $5, $10 a week is the kind of money that is easy to fritter away on a couple of coffees, but put into an investment or pension fund, over a 30-year working career… that’s a heck of a lot of money. “That’s the great thing about investing today – you can start small, you don’t have to have a big chunk of money,” Victoria says. “Even if it’s small, as long as it’s consistent, it can make a huge difference.”

Lesson #3: Ask For Help

“We take our car to the mechanic when it needs fixing, so our finances are no different in that we should be relying on professionals or experts in the industry, and be prepared to pay for it, sometimes,” says Pippa. “There’s so much information out there that it can be overwhelming for people but there are some basics you can apply when you think of investing.”

The first is your KiwiSaver account – how much are you contributing and what level of risk is your fund at, and is that appropriate for your stage of life? “Reviewing your KiwiSaver fund choice every couple of years, as a minimum, is important to making sure it’s meeting the goals you have for it.” She recommends the Sorted KiwiSaver fund-finder tool as a great way to figure out which fund is best for you.

If you want to invest your money in something more accessible than a pension fund, there are other options – like managed funds, savings accounts, or term deposits – that can give you growth opportunities as well. Find the tools that works for you – whether it be an online calculator, or digital resources, financial advisor that you trust, or a podcast series like Raising The Curve to learn more in an easy, accessible way.

That idea of accessibility is key to remember when it comes to not feeling powerless about the gender pension gap, Pippa says. “We have unprecedented levels of accessibility to investment now. It used to be really high and hard barrier to entry, but now anyone can have a go.”

Lesson #4: It’s Never Too Late Or Too Hard To Start Investing

“We get asked so many times ‘Have I missed the boat?’ ‘Is it too late to start?’ and it’s like, nobody has missed the boat, at all,” Victoria says. “Even if you had one or two years left of your life, you can still start investing. It’s never too late to learn any new skill – and investing IS a skill. It’s like learning tennis or to play the guitar, there is no age limit on it. If you learn consistently and you invest consistently, then you’re going to see results.”

“Investing is a skill. It’s like learning tennis or to play the guitar, there is no age limit on it.”

If you feel pretty comfortable with your own saving or investing habits, but you’re aware that an older friend or family member might be at risk of the pension pay gap, encourage them to start learning the basics. “I think empowering women of all ages to be engaged with their finances is a great start,” Pippa says. “It’s about dipping your toe in the water – you have to start somewhere and sometimes you might listen to something and you might not understand it all, and that’s okay.”

It’s good to keep that ‘learning a skill’ mentality when it comes to money – you would feel comfortable asking a question about playing tennis if you were a beginner, without feeling like you needed to be an expert immediately. What if we extended that curiosity to investing?

Lesson #5: Prioritise Your Own Money and Financial Freedom

One of the reasons women can end up with less money is because they’re more likely to put their money into their family or having a nice home. Victoria says, “Now, we’re more independent and we’re contributors in the work force and in the home, we do have to think about that. It comes down to being a lot more independent.”

‘Because money can’t buy you happiness, but it can buy you options.’

“Personally, I think that women need to be more confident at seeking promotions and asking for pay rises, so that they don’t have that big pay gap,” Pippa adds. “Often, they are really overqualified for the roles they apply for. Women need to keep backing themselves from a career perspective to ensure they are being paid in line with the market.”  

Because money can’t buy you happiness, but it can buy you options. And if we know that relying on an income alone can’t guarantee financial security in our future, then we have to educate ourselves on how to get there. “A lot of freedom comes with financial knowledge,” says Victoria. “In terms of emotional freedom and relationship freedom. There are so many elements to it.”

A note on this story: BNZ recognise people of all genders, including men, women, non-binary, intersex variation and more genders. The studies referenced and this article does not fully represent this diversity.

This article is only for your information. It’s not professional advice (financial, legal, or otherwise) and can’t be relied upon. If you do use or rely on it, then no one, including BNZ, is liable for any resulting losses (both direct and indirect). Opinions may not be the same as BNZ (or anyone else). For help, please contact BNZ or your professional advisor.

BNZ Investment Services Limited, a wholly owned subsidiary of BNZ, is the Issuer and Manager of both the BNZ KiwiSaver Scheme and YouWealth. A copy of the relevant Product Disclosure Statement is available on or pick up a copy from any BNZ branch. Investments in either the BNZ KiwiSaver Scheme or YouWealth are not bank deposits or other liabilities of Bank of New Zealand (BNZ) or any other member of the National Australia Bank Limited group. They are subject to investment risk, possible delays in repayment, possible loss of income and possible loss of principal invested. No person (including the New Zealand Government) guarantees (either fully or in part) the performance or returns of the BNZ KiwiSaver Scheme or YouWealth, including the repayment of capital.

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