Financial Stability for Women in Older Age

Policy Statement: Financial Stability for Women in Older Age

Minimum wages and benefits need to be increased so that all people have living incomes. In particular, women need increased incomes to promote full participation in society and to support our dignity as we age.

Globally, older women are the fastest-growing group living in poverty. The Women’s Rights Party fully supports the right of older women to live full and healthy lives, well into older age.

Quality housing is a priority and should be affordable and available for all. Women can be living in poor housing because of a change in circumstance, low incomes and/or little or no savings as a result of a number of issues specific to them. The low levels of home ownership amongst older women is also a reflection of these issues.

In addition to suitable, affordable housing, access to healthcare and financial stability are key to securing older women’s dignity and safety as we reach older age. Single women in particular who are retiring with minimal savings and in rental accommodation, are struggling to manage financially on their own.

The Women’s Rights Party advocates for accessible and free financial advice and support to be available to all women, as needed.

The Women’s Rights Party is fully committed to working with the Office of Seniors and across the socio/political spectrum to engage with communities in finding national and local solutions to a growing problem for women as they age.

Inequity in retirement savings

Women, due to low pay in typically female jobs, low income over their lifetime, part-time employment and career breaks to raise children, and disadvantage following relationship breakdowns, are more negatively affected financially as we age.

A major source of the disadvantage women face in retirement is inequity in retirement savings. In New Zealand, the average KiwiSaver balance for women is 25% lower than the average balance for men across all age groups.

The drivers of KiwiSaver inequity are well understood, and it is clear that more can be done by the Government to improve equity in retirement incomes for women. We support the following proposals:

• Require an employer to treat all its employees the same when it comes to the employer KiwiSaver contribution.
• Address pay equity. The “pay gap penalty” on KiwiSaver contributions is equivalent to an additional three or more years of retirement income; a meaningful difference in spending potential as women tend to live longer than men.
• Continue employer contributions to KiwiSaver during maternity leave.
• Address the so-called “motherhood penalty” with a contribution by the State to carers’ KiwiSaver funds, that recognises the social value of childcare provided by those who are not in paid employment (usually mothers) and by those who are the primary carers for dependants and other family members who need a high degree of support.

One in 5 older women struggled to make ends meet.

In 2020 20.1% of women over 65 were said to live in poverty (overall rate 16.8%). In 2014 this figure was at 14% compared to 6.6% of men (OECD 2017a). This upward trend reveals an overall increasing rate of financial insecurity for older women over time. Traditionally older people have had the most favourable distribution of living standards. It is very hard to find out whether this remains the case.

While older women in New Zealand are a diverse group, this policy recognises that women are less likely to be in a position of ensuring they are financially secure as they move into older age. NB New Zealand does not have an official poverty line.

Proposed changes to Superannuation

Proposal by ACT Party to raise the age of superannuation to 67yrs by/in 2040. This change has been proposed before (National Party 2017, to be progressive from 2037). ACT would like to de-link Kiwi-Saver from superannuation payment, enabling access at 65 years. What will be the impact on women of any proposed changes to age of entitlement and how will financial hardship be mitigated?

A rise in social tension

Politicisation of the idea of generational stages and their attributes (Gen Y, Boomers etc) has contributed to a rising tension across generations that is changing our culture and society. What does this mean for political and social support for the financial stability of women in older age?

Future Proofing Is Needed

• Women earned 86.14% of men’s earnings (June 2018).
• Average wages for women vary greatly depending on the industry/occupation they work in.
• Earning capacity is affected by lower pay over working life, career interruptions, reliance on a pension that doesn’t cover costs.
• Covid-19 impacted on women’s financial position. How will this factor affect the financial wellbeing of women age 55 years and over who will be retiring within the next decade? One in 5 older women struggled to make ends meet.