Asia Pacific has one of the lower global wealth gaps on average for gender wealth equity
SYDNEY, November 3, 2022 — A new global study from WTW (NASDAQ: WTW) highlights a startling difference between the wealth accumulation of men and women at the point of retirement around the world. The 2022 WTW Global Gender Wealth Equity report, out today, shows that on average women are expected to reach retirement with just 74% of the wealth accumulated by men. In Australia, women are expected to accumulate 72% of men’s wealth levels, two points below the global average.
The study highlights that the gender wealth gap at retirement increases with seniority. Globally, women in senior expert and leadership roles were found to have less than two-thirds (62%) of the accumulated wealth that their male counterparts enjoyed at retirement. For mid-level professional and technical roles, the gap was still substantial at 69%, but it narrowed considerably to 89% for frontline operational roles.
Within Asia Pacific (APAC), the findings show considerable differences in expected wealth accumulation at retirement and progress made towards gender wealth equity across the region. Across the 12 markets in the region, the gender wealth gaps range from 64% in India to 90% in South Korea.
Six markets included in the analysis have a higher wealth index at retirement for women compared to the global average, and among them are China (78%), Japan (82%), Philippines (79%) and Singapore (79%).
In Australia, only 7% of women occupy senior expert and leadership positions, slightly below the global average of 9%. The average gender pay gap in Australia over a working career is slightly better than the global average across the working profiles examined. However, the structure of superannuation with relatively higher contribution caps provides a greater opportunity for higher earning males to accumulate greater superannuation wealth over their working life. That is a contributory factor to the lower Wealth Equity Index relative to the global average, along with the loss of superannuation guarantee contributions during career breaks when taking parental leave. Compounding this is the fact that women typically have lower investor confidence and risk tolerance which results in a higher wealth gap at retirement.
Manjit Basi, Senior Director, Integrated & Global Solutions, WTW, said: “The results from our global analysis are startling. It shows that there is a gender wealth gap consistently across the 39 countries that we studied. The primary drivers contributing to gender-based wealth disparity include gender pay gaps and delayed career trajectories. Additionally, gaps in financial literacy and family caregiving responsibilities outside the workplace influence women’s participation in paid employment and therefore their ability to build wealth.”
Louise Campbell, Head of Retirement Australia, WTW, said: “Given the variety of cultures, traditions and differences in the relative prosperity and social equality across the APAC region, it’s unsurprising that the results are mixed. However, it is surprising that wealth equity for women in senior expert and leadership roles remains a particular challenge for Australia. It’s imperative that activities around gender diversity, equity and inclusion broaden to look at economic wealth at the end of women’s working careers.”
“Pay is a fundamental factor that underlies the gender wealth gap and while addressing the gender pay gap will partially close the wealth gap, it won’t eliminate it entirely. Enabling career progression and designing total rewards programs which do not penalise women for taking career breaks and assuming career responsibilities is imperative to provide a more equitable wealth outcome for Australian women.”
The study highlights that there has been an increasing focus on reversing the trend of gender discrimination through the recent environmental, social and governance (ESG) awakening. In addition, corporate efforts to further diversity, equity and inclusion have helped narrow the gender pay gap and underrepresentation of women in board and leadership roles. Yet there remains more to be done.
“Gender inequity in wealth accumulation is under-researched and overlooked. The reality is that the wealth inequity issue and its causes and effects are multidimensional and should be studied and addressed as such,” added Basi. “By focusing on accumulated wealth at retirement, the disparity can be quantified, and actions can be taken through broader society, government and organisations to equalise wealth outcomes.”
“This is a clear opportunity for corporations to differentiate themselves as progressive employers by taking action to support the equalisation of gender wealth accumulation.”
The WTW Global Gender Wealth Equity report follows a collaboration between the World Economic Forum (WEF) and WTW earlier this year which released initial insights into the wealth gap in its Global Gender Gap Report.
The WTW Wealth Equity Index (WEI), developed in collaboration with the World Economic Forum, takes a holistic view across women’s working lifetimes and attempts to quantify the extent of the gender wealth gap for a selection of countries globally. It analysed the quantitative and qualitative aspects of gender wealth equity, with deep dives into 39 individual countries.
Previous gender studies have focused on assessing gender disparities from the single lens of pay, career, pensions and longevity or workforce representation. The reality is that the issue of gender inequity and its causes and effects are multidimensional. By focusing on accumulated wealth, we consider the effects of many intermingled inequities, including pay, career progression, financial literacy and events that occur during a working lifetime. And we can measure through one metric — accumulated wealth at retirement.
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