Madeleine Gasparinatos and son, Archie.

GROW Super announced yesterday their fee-free parental leave initiative to raise awareness to the growing super gap with women on average retiring with nearly 40% less than their male counterparts; an issue with devastating effects on Australia’s ageing population that will become even more challenging with increased cost of living in the future.

Currently, the average Australian woman will retire with just $157,000 (Source: The Association of Superannuation Funds of Australia Limited) which will be exhausted within 5 to 6 years into retirement (based on minimum wage). Even more alarming is that over 30% of Australian women have no superannuation at all and the fastest growing demographic of people experiencing homelessness are single women over the age of 55. Couch surfing among older women has almost doubled over the past four years and there has been a similar rise in the number of older women sleeping in cars. (Source: Report by Homelessness Australia, 2018).

Key drivers for the shortfall include the wage gap, but more predominantly, time spent out of the workforce due to parental leave with women still chiefly the primary caregiver when it comes to taking time out of the workforce to raise families. (Source:Australian Bureau of Statistics)

Consider a woman who has two children, one at age 32 and one at age 34, and takes 1 year of maternity leave following the birth of each child. Assuming she is on a salary of $80,000 and works under a standard maternity leave policy, the woman might get paid super for 3 months, meaning she will miss out on 18 months’ of superannuation payments amounting to $11,400. The disparity during that time is not insignificant and would have been more than  $72,000 1 in compounding super growth that your partner would not have foregone.

Madeleine Gasparinatos, 33, the Head of Content for GROW Super recently returned to work after taking parental leave to have her first child, Archie, who is now six months old. She says, “People seem disengaged with their Super, it’s so far into the future they rarely think about it or don’t make it a priority. This can have devastating outcomes on quality of life.”

If, from the age of 30, you have one coffee a day instead of  two, putting the saving into your superannuation would result in over $161,000 added to your balance by the time you’re 65. 2 GROW Super’s Roundups feature on its app allows you to easily add spare change from everyday purchases to contribute straight into your super account making powerful impacts easier to achieve for those that struggle finding lump sums.

Madeleine continues. “What we do now compounds over time and makes a staggering difference to quality of life in our later years. Age old advice still rings true; small actions now can make a big difference in the future.”

Madeleine, with the full support of GROW Super CEO Josh Wilson, has been the driving force behind this fee-free parental leave campaign. She is determined to get women thinking about this and ultimately educate people on what they can do to try and close the super gap, not just the wage gap.

Madeleine’s top three quick and easy changes for a fitter financial future are consolidating super accounts to avoid fees and maximise growth, a task that takes 90 seconds on the GROW Super app. Secondly, checking that your super fund has classified your job class correctly for your insurance cover, which  can potentially save you thousands, and thirdly; connect your bank account within the app and start doing roundups.

GROW Super is providing fee-free super for new parents for up to 6 months following the birth of their child – this is offered to both men and women as long as they are the primary carer. GROW Super’s own parental leave policy is to pay full superannuation guarantee payments for 12 months for those on parental leave, putting their money where their mouth is.

Employers supporting their staff and providing flexible superannuation options for parental leave will also contribute towards closing the super gap and the issues it affects. During time on leave, typically no superannuation contributions are being received yet fees are still being incurred, creating a negative financial effect. GROW Super is hoping other funds will join them in offering fee-free parental leave.

The initiative was brought to life to start conversation, prompt employers to consider their own parental leave arrangements and encourage people to make changes now for their financial future so that time out raising your family doesn’t mean taking away from your future.

GROW Super is  available to download for free on iTunes App Store and Google Play for Android. You can use the GROW Super App on your iPhone, Android, tablet or desktop. For more information please go to www.growsuper.com

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