This Financy article was first published by Yahoo Finance. Women are sick of the guilt trip for draining lifetime superannuation savings due to COVID-19 financial hardship.
That’s the word from Christina Hobbs CEO of female focused fund, Verve Super. She says around 13% of her members have accessed super early and it’s been a “lifeline” for many to pay bills, rent, purchase fresh food, prop up small businesses, and flee domestic violence.
“Many Australians who desperately need additional money to meet their basic needs during COVID-19 are frustrated with the messaging about how much money they would lose in retirement, they feel blamed and demoralised.”
Data provided by industry super fund HESTA, which has 80% female membership, shows that the median female balance of those who applied for the first wave of the Federal Government’s early release of superannuation scheme is now $16,126, a reduction of 32 per cent.
The vast majority of female HESTA members who claimed their super under the early access scheme applied for the full $10,000.
“We understand how challenging the economic impact of COVID-19 has been for many people,” says HESTA CEO Debby Blakey.
The average application across all funds is for $7,641, according to the Australian Prudential Regulation Authority (APRA).
In total about 2.8 million initial applications, and 800,000 repeat applications, have been made since on April 20.
“For many women it is a tough decision to access their superannuation now, knowing that they are borrowing the money from their future selves,” says Ms Hobbs.
Figures also show that men are making more early withdrawals of their super than women.
Initial data provided by the Australian Tax Office to the Senate Standing Committee on COVID-19 shows that more men are making withdrawals from their super compared to women, with 782,900 males and 588,800 females as of May 11.
One of the reasons given for there being more male than female withdrawals is to do with the smaller balances of women and the larger available balances of men.
Based on the median account balance, the average women has $45,000 in her superannuation account which is 31% less than the average man with about $65,000 according to the Australian Bureau of Statistics.
HESTA data also shows that women made up 79% of total applications for early access to their super, which is broadly in line with the fund’s membership gender split of 80% women to 20% men. The super fund has nearly one-million members.
Of those HESTA members who have applied for early release, younger women between the ages of 25 -39 made up around 40% of all applications, while women between the ages of 25 -39 made up about half of all female applicants.
“The strength of our super system has meant that we’ve been able to provide this vital support to our members in need and have paid out more than $923.6 million to approximately 116,054 HESTA members,” says Ms Blakey.
“When the second round of early release opened in July we found that initially about 11.3% of total applications were from members who had already accessed their super in the first round.
“We are very concerned that members accessing their super a second time may significantly deplete their accounts.
“Given the median account balance for members who withdrew funds in the first round is now around $16,000, many accessing a second time may be left with very little super,” says Ms Blakey.