How can women catch up on saving?

Sarah Whitelock, product manager at Mercer, says women need to be aware of how their life choices affect their retirement savings.

Women need to confront their employers over equal pay, take on more risk with their money and smooth out career breaks to catch up with men's retirement savings.

Sarah Whitelock, product leader at KiwiSaver provider Mercer, said despite KiwiSaver balances still being small a gap of between 20 to 24 per cent had already appeared between men and women's retirement savings.

"In the younger age-group it is a bit more consistent - we start to see the gap widening around 40 years of age."

Global research carried out by Mercer last year entitled 'When women thrive, businesses thrive' found women still earn less in the same occupation as men and spend more time out of the workforce caring for others impacting how much they can earn over their lifetime.

Women also tended to have a more conservative investing and saving approach than men and yet they lived longer resulting in a need to save more for retirement.

Whitelock said its New Zealand research had backed up the global findings with its KiwiSaver sentiment survey showing just 15 per cent of females felt they had a high knowledge of retirement saving compared to 25 per cent of men.

A further 35 per cent of females felt they had a low level of knowledge compared to 25 per cent of men.

Yet an actual test of those surveyed found men and women had roughly the same level of knowledge.

Whitelock said fixing the income gap between men and women would significantly narrow the difference in how much they could save for retirement over their working lives.

"If I do the same job as a man and don't get paid the same that is just wrong. If that is fixed it will have a huge benefit."

Whitelock said women needed to be aware of the potential issue and have the confidence to talk to their employer.

"You are not a bad person for asking your employer if you are paid the same as your male colleagues."

You are not a bad person for asking your employer if you are paid the same as your male colleagues.

Sarah Whitelock

Whitelock, who has taken time out of work to have three children, said women also needed to be more aware of the impact of taking career breaks and working part-time.

"I'm not saying don't have a career break or work part-time. But in making those decisions you just have to be aware it will have an impact."

Whitelock said women also tended to be more risk adverse and less confident when it came to their ability to handle financial matters.

Because of that bias she called for women to seek more financial advice and said one employer she knew of had gone out of its way to help by providing specialist financial advice for its female staff.

"Women often see investing as a tool to accomplish their goals whereas men are often more interested in "how I did today"."

Analysis of Mercer's KiwiSaver membership showed there was a tendency for men to be in the higher risk option of a growth fund and to be invested in more options than women by choosing to spread their money around more than one fund.

Typically people under the age of 40 who are not saving for their first home are encouraged to be in growth KiwiSaver funds as they give higher returns over time.

Whitelock said getting women to be more confident with their finances was an issue for all of society.

"We can't just say women have to solve it all."

"It's a societal issue."