Women could counter some of the lost earnings from the gender pay gap by switching out of a default KiwiSaver fund, according to an online platform that provides financial advice.
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According to analysis by BetterSaver, a switch could boost retirement savings by at least 20 percent, enough to counter lost earnings from the 9.1 percent gender pay gap.
Government-mandated change to default KiwiSaver funds come into effect on Wednesday requiring default funds to shift from a conservative fund into a balanced fund.
BetterSaver chief executive Joe Taylor says the new default fund might not work for everyone.
"Whilst its all right for some people, it's not for most. We see balanced funds as almost sitting on the fence when investing. You're probably not going to be maximising or minimising your loss - minimising your loss on one side or maximising your potential return on the other."
Taylor urged people to get financial advice if they had never made an active choice on KiwiSaver.
He called on women to actively make the switch out of a default fund and plan their future finances.
"Our analysis categorically shows that the negative financial impact on women of the gender pay gap is compounded by the time they reach retirement if they remain in a default KiwiSaver fund for the long term," he said.
Taylor said that when it came to retirement savings, women were disadvantaged because they put less aside than men due to the gender pay gap, and took more time out of their career to have children or look after elderly parents.
