Women are 40% more likely than men to be facing cost-of-living induced financial stress.
Women's savings buffer dropped from 15 to 13 weeks in the last 2 years.
59% of women say they are enjoying life less compared to 12 months ago due to financial pressure, compared to only 48% of men.
Savings and earnings are still less
Earnings
Australian women experience a 21.7% gender pay gap. For every dollar a man earns, a woman receives just 78 cents. This means women make $26,393 less than men on average. The Workplace Gender Equality Agency (WGEA) 2023 gender pay gap data covers base salary, overtime, bonuses, and other financial remuneration for full-time, casual, and part-time workers.
Even when only the base salary is considered, women still earn $13,183 less than men and have to work 56 days more every year to earn the same amount as a man.
The Australian Bureau of Statistics (ABS) reported a lower pay gap of 12% based on mean weekly cash earnings (AWE) in November 2023. This is the lowest difference on record. Unlike WGEA, ABS data only includes full-time employees their base pay.
Data from the ABS also highlights the differences between public (government) and private sector pay. There's a smaller gap in the public sector (11.5%) compared to the private sector (17.2%). This is likely due to the prevalence of award pay in the public sector which is closely regulated and provides more transparency for employees.
Expert insight
"Data from Finder's insightful report highlights the pressing need to address the economic and financial disparities faced by Australian women. Burden of caregiving responsibilities, unaffordable childcare, and entrenched gender stereotypes contribute to a staggering gender pay gap, costing our economy $51.8 billion annually. We must invest in women by ensuring equal access to opportunities for skills development, entrepreneurship, and career advancement, as well as promoting women's representation in leadership positions across all industries, as vital steps towards a truly inclusive, diverse, and equitable society."
Simone Clarke
CEO, UN Women Australia
The pay gap also differs across regions and industries. Tasmania recorded the lowest gender pay gap (5.7%) while Western Australia has the highest (27.7%). Industries such as education and training (9%) and healthcare and social assistance (26%) experience gaps, while the pay difference is worst in professional, scientific and technical services (31%).
These lower earnings affect many financial and non-financial related outcomes for women, most of all though, they result in lower savings.
I'm a big believer that knowledge is power and on that front, women are in the front seat: among Aussies 15 to 74 years old, more women (35.2%) hold a bachelor's degree than men (28.8%), and have earned non-school qualification at the same proportion (63%) as men. As OECD data has shown, those with a tertiary education are likely to earn a higher income in the long-run, so this is an encouraging trend.
Men were able to build much larger savings buffers during 2021. Before the full effect of government stimulus (JobKeeper) in May 2020, men saved an extra 30% of what women saved each month. A year later men were saving double what women were saving each month.
This is likely to do with workforce engagement discussed in the earnings section above. Women constitute 68.5% of all part-time employees, often to balance childcare and other domestic activities that typically still fall to women.
To be eligible for the full government stimulus handed out during the pandemic, consumers had to have been working a certain number of hours meaning that those working part-time (30% of women compared to 11% of men) in some cases were eligible for less or completely ineligible for government payments.
The same risk-aversion that makes women great investors, also helps them to save money. Analysis from our 2022 International Women's Day report showed that both overseas and at home here in Australia, women were better at managing their money – spending less in late fees, holding lower balances on their credit cards and saving a greater percentage of their income. Unfortunately in the last 18 months, cost of living pressures have impacted women more than men, and the gender pay gap means women are starting from a lower financial base.
In good news, the pink tax on some products has dropped. A report by the New York City Department of Consumer Affairs in 2015 found that women paid an average of 13% more for hair products, razors, deodorant and moisturiser products that were specifically marketed as being "for women". Finder found this disparity to still be the case in Australian supermarkets as recently as 2022. However, Finder's analysis of razors and deodorant prices in 2024 reveals parity between male and female products – a promising development.
Cost of living crisis has hit women harder
Cost of living pressures have affected more women and have had a larger impact on their finances than men. Two-thirds of women (69%) admit they have been experiencing financial stress, compared to just 49% of men. This is equivalent to 7.1 million Australian women facing financial stress.
Cost of living pressures have eroded women's savings. In January 2022 women had 15 weeks' worth of savings buffers. This has dropped to 12.8 weeks as we come into 2024. Meanwhile, men's savings buffers have increased from 17.9 weeks two years ago to 18.3 now.
As a result, many women are struggling to pay their bills. Housing expenses are causing women particular strain. Over 2 in 5 (42%) female homeowners were having difficulty paying their mortgage in January 2024. This is up from 22% at the beginning of 2022. The proportion of men struggling to pay their home loan rose from 27% to 32% over the same period.
The same is true among renters. The number of male tenants struggling to pay rent has risen by 3% (from 37% to 40%) in the last two years compared to 8% (from 40% to 48%) for female tenants.
The emotional effect of the cost of living
The outsized impact of cost of living pressures on women's finances is not only increasing financial stress, it is also affecting fulfilment and happiness.
More than half (59%) of women say they enjoy life less than they did 12 months ago due to financial pressure, compared to only 48% of men.
Cost of living setbacks: Growing wealth
Superannuation
Australian Taxation Office (ATO) data indicates that at the end of June 2021 men had 20.5% more in superannuation than women.
It should be noted that this gap fluctuates with age. For Australians in their 20's the gap is 11%. When adding the time many women have to spend out of work to birth and raise children, this steadily increases up until the age of 50, ballooning to a disparity of 36%.
To make up for this discrepancy, the average woman would have to supplement an extra $131 per month into her super, or alternatively, work a further 5 years.
Gladly, this figure has almost halved since 2022 when women needed to supplement their super by an extra $236 per month or work an added 11 years.
Worryingly, less than half of women (41%) believe they will have enough superannuation to get by in retirement compared to almost 2 in 3 (59%) of men.
Flexibility in work arrangements, such as working from home, help to encourage a range of people to participate in the workforce, especially women. For instance: the Melbourne Institute highlights that giving women at least one day's worth of WFH per week, can help reduce the unpaid work hours they contribute. Making childcare more accessible and affordable also has the potential to help improve women's career advancement opportunities.
Women may receive less financial help from their parents
Finder's recent Parenting Report 2023 which surveyed 1000 parents with children under the age of 12, found that parents plan to gift their sons 24% more to buy a home. Daughters can expect to receive an average of $29,349 towards a place in the property market while boys get $36,529.
Negativity about the ability to afford a property
The inter-generational challenges of buying property have been well-documented, however, breaking this data down by gender further exacerbates the divide.
How many years it'll take to afford a property
Concerns about affordability are entirely valid. Based on median house and unit prices today, the average full-time female worker would need to work an extra 3 years to save enough for a 20% deposit on a house or a unit.
Servicing a mortgage
Mortgage stress is defined as a consumer spending more than 30% of their income on home loan repayments. Analysis on the minimum income required to service a mortgage on the median house price in each suburb across NSW, QLD and VIC without falling into mortgage stress found that men have a much larger pool of suburbs to choose from.
A single woman in Victoria with an average annual income of around $87,552 can afford a unit in half the suburbs that a man earning an average income of $100,542 can. Single men can access units in 80% more suburbs in New South Wales and 45% more in Queensland. These splits are also similar for houses.
This is a prime example of how a pay gap of 13% to 21% can become much larger in other financial areas.
Investing
More than 1 in 3 (36%) males have a share trading account compared to only 1 in 6 (17%) females. This divide in ownership continues in the amount each gender has invested. Male investors have $88,775 invested in the shares – almost double the $45,125 women have invested.
Men have also seen their balance invested grow a lot faster than women over the past 2 years. Women's balances have only increased by 3% since January 2022 while men's balances have increased by 88%.
This is unlikely to be due to better investment decisions. Research conducted in both the US and Australia shows women tend to outperform men at investing.
Analysis by FinClear on more than 550,000 wealthy Australian traders revealed that women outperformed men in high-conviction strategies by 7.5 percentage points during the 22-23 financial year. Women returned an average 8.2% compared to 0.73% for men.
This difference has been captured in many other studies too, even as early as 2001 when Berkeley research found that men made almost 1% less than women when investing.
The outsized impact of cost of living pressures on women has likely restricted their ability to invest. This highlights the importance of reaching full equity in pay. This will afford women the same financial security as men and give them the same ability to weather tougher economic periods.
According to the Australian Securities Exchange (ASX) 2023 Australian Investor Study, half of the net 1.2 million investors who entered the market after 2020 were women. While female investors are still outnumbered (42% to 58%), this is an important move in the right direction.
"Women still routinely earn less than men when performing the exact same roles. They still retire on far less superannuation than men. And in 2024, when the theme for International Women's Day encourages us to 'Count Her In: Invest in Women', we're reminded of the pivotal role we all play in creating opportunities for everyone to thrive.
In my mother's generation, it was the law that when you got married, you had to resign from your job with the public service. The assumption was that you are married now, therefore your household has a "breadwinner" – your husband – so you should no longer be in the workforce, lest you greedily take the place of another breadwinning husband or desperate husband-less woman.
It was only in 1966 that the law was changed, though it took some time to take effect – in Queensland, for instance, the government removed its "marriage bar" in late 1969.
Stories like this can be a reminder of just how far we've come as a society, when it comes to equality and equity in the workplace.
However, reports like this one stand as a call to arms to continue making progress."
"Finder's research raises some vital points about the financial experiences of women, including the toll that the cost of living crisis has taken on them. It shows 20% more women than men are financially stressed – and that women typically have half the savings and a third of the emergency funds men have access to.
Gender pay gaps play a part in this, but beyond that it's also worth thinking about what risks can come from not having enough in the bank. For example, Finder's research shows women take longer than men to pay off their credit card debt and have more of it. But they're also smart when it comes to choosing cards with lower rates, so it may not always be by choice that they carry a higher balance. Especially when expenses like the pill, period products and even medical diagnoses typically cost women more.
These things didn't happen overnight and they won't disappear overnight. But one of the most valuable steps we can take towards equality is to talk about what's different – and how we can change it, together."
Joshua Godfrey is an insights analyst for Finder. Josh manages Finder's monthly Consumer Sentiment Tracker and quarterly reports which examine the financial issues currently affecting Australians. He has a Bachelor of Business and Diploma in Innovation from the University of Technology, Sydney where he studied finance and marketing. See full bio
Joshua's expertise
Joshua has written 25 Finder guides across topics including:
Finder's student finance statistics show that 33% of full-time students are extremely stressed about money and nearly half struggle with rent.
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