Women retiring with less but what will close the gender savings gap?
Women generally live longer than men but many are favouring a more conservative “set and forget” approach to their investments, according to new data from ANZ Investments.
Thursday, March 13th 2025, 6:00AM
by Kim Savage
Women generally live longer than men but many are favouring a more conservative “set and forget” approach to their investments, according to new data from ANZ Investments.
Research studies have proven women to be more cautious, calmer, and better long-term investors than their male counterparts, although it can in some cases lead them to make more conservative choices. The findings from ANZ Investments align with the theory, with men making up two thirds of the company’s high growth fund option.
The gender divide is also seen in other KiwiSaver fund types as well, says ANZ Investments Managing Director Fiona Mackenzie. Conversely, within the company’s Lifetime products which automatically change a member’s fund based on age and investment horizon, the gender gap disappears and women members account for more than 50%.
The numbers could mean many women are not being proactive about choosing the right investment for their life stage, Mackenzie.
“That gender divide is really concerning, because if you think about women facing into these dual headwinds, we live longer than men, so therefore financially we've got to be set for a longer life after 65 and of course, we tend to get paid less, so that makes it harder for us to save.
“With sort of two external factors, it makes our fund choice at the personal level even more important.”
The women Nicky Reid at Milford Asset Management advises tend to have a higher risk tolerance, she says, but often confidence can be what holds them back.
“I think women take on a disproportionate amount of non-work activity and maybe have less head space to focus on their finances.
“But I find that my clients once they build more confidence, and I really encourage them to read all our literature and watch our videos, and as their financial confidence and knowledge fills, then they're actually just as likely to take investment risk as their male counterparts.
“It's actually just about giving them that support to make great decisions.”
System change or client advice or both?
The gender gap in ANZ KiwiSaver average balances is almost $6000, but analysing just men and women KiwiSaver members at age 64, the gap widens to $17,000.
The link between KiwiSaver and a member’s employment amplifies the gender pay gap, turning it into a savings pay gap down the line, says Fiona Mackenzie.
“I think employers are definitely leading into this space in terms of making sure that if people are taking carers leave, then they are continuing their KiwiSaver contributions on the way through, I think that's really important.
“And of course, in New Zealand, we've been working really hard over the last 10 to 15 years to close gender pay gaps.”
At the advice end, Milford financial advisor Nicky Reid encourages clients in relationships to think independently, with partners supporting one another to ensure neither is disadvantaged.
“For clients that I see in their 70s and 80s, oftentimes they've (women) taken a back seat on the investment decision-making in their relationship. Some of it's just purely generational, but the challenge is, you live longer. So most women are going to end up alone, unfortunately.
“We're all going to have to take care of our finances one way or the other, so it’s important to start sooner rather than later, to know what the financial position is, to get involved, to build that knowledge.”
Fiona Mackenzie of ANZ Investments says big picture changes like raising the default KiwiSaver contribution rate to 4 per cent, encouraging self-employed people to contribute and incentivising young KiwiSaver members through things like matching contributions for under 18s, should all be in the mix to help close the gap.
“I would describe it as a really gnarly problem, and I think it will take all of us to solve so employers, government, KiwiSaver, providers, working together is how we will almost confront reality a little bit and work together in terms of what those evolved changes could be.”
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