A Financial Decision That Could Cost Women $200,000
The gender gap in savings is narrowing, but women still face a significant financial challenge. According to Westpac, the gap between men's and women's average KiwiSaver balances has decreased from 17% in 2020 to 14% in 2025. However, this doesn't tell the whole story. Men contribute and save more, even though women tend to live 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 General Manager, Sarah Hearn, explains that the gender pay gap and time out of the workforce contribute to this difference. But it's also about risk. Women are more likely to be in less risky funds, which could cost them tens of thousands of dollars over time. Higher-risk funds have historically delivered higher returns, with aggressive funds averaging 9.5% annually over 10 years, compared to 4.2% for conservative funds.
The key takeaway? Women who take a more defensive strategy early in life might miss out on significant gains. Hearn suggests that women should consider the type of fund they're in, especially if they're saving for the long term. She encourages women to take a closer look at their risk tolerance and the time horizon of their savings. By doing so, they can ensure their money is working harder for them in the long run.
But it's not just about individual choices. Hearn emphasizes the importance of open conversations about money. She notes that men are generally more comfortable discussing financial matters, and women could benefit from having more conversations about their KiwiSaver balances, returns, and fund types. This transparency can help bridge the gap and ensure women make informed decisions about their financial future.
So, the question remains: Are women taking on enough risk to secure their financial future? The answer might surprise you, and it's a decision that could cost women $200,000 or more over their lifetime.
