Why women’s retirement security needs to be next big conversation

Friday, 14 November 2025

Jane Wrightson is New Zealand’s Retirement Commissioner. Once every three years she must review this country’s retirement income system.

OPINION: For many New Zealand women, the dream of a secure retirement is slipping further out of reach. Despite decades of progress in workplace participation and financial independence, the reality at retirement age often tells a different story – one in which women are left with less.

The 2025 Review of Retirement Income Policies, undertaken every three years by Te Ara Ahunga Ora Retirement Commission, paints a nuanced picture. On one hand, NZ Super continues to provide a vital safety net and KiwiSaver is helping more people build savings for later life. On the other, a stubborn gender gap in retirement savings persists, reminding us that progress has not been evenly shared.

This challenge is set against a backdrop of shifting demographics. By 2050, the number of New Zealanders over 65 will increase by 50%, and women will make up the majority.

At the same time, home ownership is declining. In previous generations, a mortgage-free home cushioned retirement for most. For many women today, that buffer is gone.

Without intervention, the gender gap will deepen, and its effects will ripple across families, communities and the economy.

Women are retiring with less and living longer on smaller balances. This is not a matter of individual budgeting or financial capability alone. It is the cumulative result of structural inequities that shape women’s lives from their first job to their last.

When we talk about gender equity, pay gaps tend to dominate the headlines, but retirement savings tell a deeper story. Women’s financial disadvantage in later life stems from life patterns, not just wages.

The MartinJenkins report prepared for this review takes a life-course approach to understanding why women retire with less. It identifies six critical stages in which policy interventions could make a difference: education, work, relationship status, parenting, housing tenure and retirement.

At each stage, women face disadvantages that compound over time. Lower pay, interrupted careers, part-time work and caregiving responsibilities all reduce lifetime earnings and, in turn, retirement savings.

KiwiSaver contributions are based on income, so people who earn less save less.

Added to this are the compounding effects of ethnic and gender pay gaps. Women are over-represented in lower paid jobs and industries, which directly affects their ability to accumulate retirement savings.

Women are also more likely to earn under $30,000 annually, while men are more likely to earn over $70,000. These disparities are even more pronounced for non-Pākehā women.

Women contribute to KiwiSaver at similar rates to men, but their contributions are smaller and less consistent because of these factors.

The result?

Men’s KiwiSaver balances are, on average, 25% higher than their female partners, daughters, mothers and women colleagues – and the gap widens with age.

The review also highlights the impact of the ‘motherhood penalty’. Time out of the workforce or reduced hours for caregiving means missed KiwiSaver contributions and lost employer top-ups. Divorce and separation can further erode retirement security, with many women not always seeking professional advice to understand their entitlements to relationship property or KiwiSaver balances.

Housing adds another layer of vulnerability. Women are less likely to own their homes outright and more likely to rent in later life, making them heavily reliant on NZ Super to cover housing costs. And because women live longer, their smaller savings must stretch further.

These patterns reflect systemic inequalities that are also recognised under international human rights law. The Convention on the Elimination of All Forms of Discrimination Against Women obligates governments to eliminate discrimination in social security and to address the gendered impacts of unpaid care work.

Ultimately, these findings demand action to make the retirement income system fairer.

The 2025 review recommends a suite of policy responses, because no single lever will close the gap and lasting progress depends on more than just short-term fixes.

Parental leave is a critical period in life that can disrupt retirement savings. Currently, people on paid parental leave may struggle to maintain KiwiSaver contributions, which can lead to long-term gaps in retirement savings.

As part of the review, I recommend extending the KiwiSaver parental leave government contribution to $1000 per leave period, regardless of whether the member can contribute.

Government contributions to KiwiSaver play an important role in supporting adequacy in retirement savings, particularly for those on lower incomes, which disproportionately includes women. There is an opportunity to better target support for lower income groups by increasing the government contribution to KiwiSaver.

Based on Commission modelling, if the Government contributed 50 cents for every dollar saved up to $500 a year, for someone earning $30,000, it could mean an extra $22,000 in retirement savings.

One possible way to fund this would be to lower the income threshold further for the KiwiSaver government contribution, focusing support where it is needed most without raising overall government expenditure.

This approach would mean that fewer people would receive the government contribution, but they would continue to receive support for their retirement through NZ Super and matched employer contributions to KiwiSaver (the employer contribution doubles their savings).

When the time is right, a wider increase in government contributions could also be considered as a source of funding to support reform change.

Closing the retirement gap is about fairness. It requires enduring solutions and bold action from policymakers, employers and financial providers. With the right knowledge, women can of course tackle some of the issues themselves, but the system is stacked against them.

Underpinning this is my view that retirement policy as a whole needs to rise above political cycles and what is often random chatter. This is why we need political leadership to secure a cross-party accord: to provide a formal foundation for collaboration, helping to resolve disagreement, reduce the risk of policy reversals, and build long-term confidence in a stable system that people can trust.

We then need to use this accord to drive the work of a Parliamentary working group to debate and set the strategic direction for a 10-year retirement income roadmap, then charge a pan-sector group, including industry, to develop and propose agreed practical legislative and operational solutions. This is a calm and citizen-focused approach that could drive the right long-term change.

All the parliamentarians I’ve met who are interested in this area are smart and capable.

We need them to work together on this.

Government must design policy that reflects the diversity of women’s lives. Women have carried the weight of unpaid and lower-paid work for generations. They should not carry financial insecurity into retirement as well.