media release
1 August 2025
Women could see $400k retirement boost under 12% super, new modelling reveals
Women beginning their careers in 2025 with the new 12% super guarantee rate in place could be hundreds of thousands of dollars better off in retirement, new modelling has revealed.
The new data comes as millions of working Australians start to see 12% super hit their accounts.
The modelling showed women representative of the average HESTA member were projected to retire with $712,000[1] if earning the new higher rate of super for their entire working lives – a $411,000 boost compared to women modelled to retire this year.[2]
HESTA CEO Debby Blakey said the modelling, which factored in time out of the workforce to care for children and part-time work, demonstrated the significant impact on retirement balances from the higher super guarantee.
“The increase in the super guarantee to 12% marked another milestone for Australia’s world-class retirement system and has already started to benefit millions of working Australians. This modelling shows its clear value in helping more women retire with dignity into the future,” Ms Blakey said.
“Nearly 80% of HESTA’s more than one million members are women, working in typically lower-paid industries such as aged care and early childhood education. Many take time out of the workforce to care for children or loved ones, and this further impacts their ability to build adequate super balances.
“The modelling suggests women starting work today could retire with more than double the amount of super compared to female workers modelled to retire this year.”
Since 1 July, employers have been required to pay 12% of eligible employees’ ordinary time earnings, up from 11.5%. The introduction has also coincided with the super payments on Commonwealth Paid Parental Leave, helping address the fact that Australian mums have missed out on well over $3 billion in super savings at retirement.[3]
While welcoming the early impact of the reforms, Ms Blakey said there remained opportunities to make Australia’s super system fairer for women and low-income earners.
HESTA is advocating for an increase to Low-Income Super Tax Offset (LISTO) eligibility to the second marginal tax threshold of $45,000 and lifting the payment amount to ensure low-income earners are not disadvantaged by paying more tax on their super contributions than on their take-home pay.
The Fund is also calling for super to be paid on the Commonwealth Carer Payment, and for indexation of the Work Bonus threshold so it keeps pace with wage rises and the cost of living. This will mean retirees can work more without impacting their Age Pension.
“The lift to the super guarantee and paying super on Commonwealth Paid Parental Leave are fantastic steps to strengthen Australia’s retirement system, but there are still policy settings that disadvantage women and those earning lower wages,” Ms Blakey said.
“These changes should be seen as the foundation for further progress on creating a fairer super system, not the end.”
|
Scenario 1: Retiring in 2025 (baseline) |
Scenario 2: Career begins in 2025 earning 12% super |
Career Situation |
|
|
Super Guarantee |
|
|
Estimated Retirement Amount |
$301k |
$712k |
Difference |
- |
$411k or 137% better off than scenario 1 |
Modelling prepared by HESTA and partner Laneway Analytics is not a prediction, is for illustrative purposes only and as such the outcome cannot be guaranteed and may be different. The modelling made assumptions including: Begin career at age 18; Retirement age 67; AWOTE: 3.7% pa; CPI 3.7% pa; Investment return net of investment fees and taxes CPI +3% pa; 18-year-old HESTA member account balance $1500; 18-year old HESTA member total contribution $1543 for first year of work, then contributions made annually thereafter based on HESTA’s assumptions around salary progression; Default insurance cover (premiums CPI-adjusted); Accumulation fixed fee $52 pa (non-indexed); Accumulation variable fee 0.15% pa (non-indexed); Full-time work at ages 18 to 30, 44 to 67; 26 weeks of super on Paid Parental Leave at ages 31 and 33; Part-time work (0.6 FTE) at ages 34 to 43; No other retirement savings.
[1] Estimated retirement amount (ERA) for a typical HESTA member who will start their career on 1 July 2025 and retires on 30 June 2074, earning 12% super for their full career.
[2] Compared to the ERA for a typical HESTA member who started their career on 1 July 1976 and will retire on 30 June 2025, earning 3% super starting 1992 and taking account of historical super guarantee increases.
[3] Modelling by Laneway Analytics (dated February 2024) estimated the benefit to Australian women as of 31 December 2023 if superannuation had been paid as part of the Commonwealth Parental Leave Pay scheme since it was introduced on 1 January 2011.
Ends.