Women's financial future at stake: A $200,000 decision
The gender gap in KiwiSaver balances is narrowing, but women still face a significant financial challenge. According to Westpac, the gap has decreased from 17% in 2020 to 14% in 2025, yet men continue to contribute and save more, despite women generally living longer. This disparity is particularly evident in the 30-39 age group, where men's average balance is $28,992, compared to women's $21,740.
Westpac's Sarah Hearn highlights several factors contributing to this gap. The gender pay gap and time out of the workforce play a role, but women's preference for less risky funds is also a significant issue. While higher-risk funds offer the potential for greater returns over time, women's more conservative approach could result in a substantial loss of potential earnings.
The data from Morningstar reveals a stark contrast in fund performance. Aggressive funds have delivered an average annual return of 9.5% over 10 years, while conservative funds lag with a 4.2% return. Hearn warns that women's early defensive strategy could cost them tens of thousands of dollars over their lifetimes.
Westpac's earlier estimates suggest a conservative fund holder could lose over $225,000 in potential earnings over 30 years compared to someone in a growth fund, assuming a 6% total contribution. Hearn urges women to reconsider their fund choices, especially if they are saving for the long term. She emphasizes the importance of aligning fund types with risk tolerance and investment timeframes.
Hearn also encourages women to engage in open conversations about their financial decisions. She notes that men are generally more comfortable discussing numbers and money, and suggests that women could benefit from sharing more about their KiwiSaver balances, returns, and fund types. By doing so, women can make more informed choices and potentially secure a more prosperous financial future.
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