Govt funded financial literacy program needed
The Government needs to fund or subsidise a financial literacy program to address the gender gap in superannuation, the Association of Financial Advisers (AFA) believe.
The AFA's submission to the Senate inquiry into the economic security for women in retirement pointed to research that found women having a lower level of financial literacy than men, women had a higher propensity to find finance stressful, and women were less likely to seek financial advice.
The AFA recommended the Government to implement a comprehensive education and specific superannuation focussed financial literacy program targeting women in specific segments of greatest need.
They recommended the program should:
- Be incentivised and either Government funded or subsidised;
- Education focussed on awareness of issue, maximisation of accumulation and maximisation of returns;
- Based on lifestage event triggers;
- Incorporate partnership with key industry groups such as AFA Inspire;
- Incorporate partnerships with large employers of women and relevant industry super funds;
- Look to leverage other key ‘touch points' to educate at key lifestage events such as an adjunct to existing anti-natal classes; and
- Incorporate key community groups.
The AFA noted that while the changes would initially cost the Government a significant amount of money, the long-term outcomes would benefit not only future Government spending but also assist the future of retirement for both males and females.
"These savings will be realised during retirement from a perspective that women would retire with more money in their superannuation fund," the submission said.
"This would place less pressure on the aged pension across the board. As statistics prove women live longer than men, the reliance on the Aged Pension is more significant for females than males."
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