How the super fund, GigSuper, is closing the employee retirement gap

Melissa Browne, Author of Unf*ck your Finances and Budgets Don't Work (But This Does)

For hard-working self-employed Australians, including those working in the gig economy (creatives, builders, freelancers, consultants, etc.), retirement can feel a long way off.

So far off, in fact, that the idea of contributing money voluntarily towards super feels ironically indulgent. The pull is often stronger to reinvest that money in the business or to spend it on something more immediate than retirements like treats for our partners or kids.

This short-sightedness is worsened by the fact that contributing to your own super, for anyone not well versed in accounting, seems a complex task better left to those in the know.

A task for another day, another year… sometime in the future when the stars align.

The fact is, this hesitancy to contribute to super has led to two worrying, ever-widening gaps: firstly, between the super balances of the employees versus self-employed people and, secondly, the gap between the balances of self-employed women versus self-employed men.

Most self-employed have no super

The Association of Superannuation Funds of Australia (ASFA) has found that around 20% of self-employed Australians have no super at all (compared with just 8% of employees).

Moreover, self-employed Aussies in the run-up to retirement generally have around half the superannuation of employees. Only 30% of self-employed people aged 60 to 64 have more than $100,000 in superannuation, compared with almost 60% of employees.

As if the gender pay gap in Australia wasn’t already troubling enough (currently at around 14% overall), ASFA has even more bad news: on current trends, self-employed women will retire with only a little over half the super of their male counterparts.

While self-employed men can expect to retire with around $143,000 in their super accounts, for self-employed women, that number sits at just about $83,000.

Since a full 10% of the Australian workforce is already self-employed, a proportion is only likely to increase with the ongoing rise of the gig economy (and in the wake of the pandemic).

It is important that we see these gaps steadily begin to close, rather quickly, before a number of Australians (and, disproportionately, women) fall through the cracks.

Thankfully, some solutions are coming together. An Australian company trailblazed new methods of super contribution for self-employed people and female business owners.

Australian super fund GigSuper is a purpose-built super fund to support the self-employed.

The company has just released its strongest member outcomes, which collectively demonstrate that when the self-employed are given the correct tools, they not only make ongoing super contributions but also close the worker and gender superannuation gaps.

A few of the stats that came from their audit include

  • GigSuper’s self-employed are 3 times more likely to make contributions to super
  • Using GigSuper, self-employed Australians can double their expected retirement savings
  • A staggering 83% of GigSuper members are already successfully claiming their super contributions as a tax deduction (compared to just 10% elsewhere)
  • By creating a brand that engages young people about their finances through an intuitive platform and easy-to-understand language, the average GigSuper member in their twenties is projected to retire with an extra $181,000

GigSuper takes on partners to better its outreach

In addition to tackling the self-employment gaping super gap head-on, GigSuper has partnered with a number of community and networking groups.

The groups were specifically built to connect and empower Australia’s entrepreneurial mothers; Mums&CoThe Belle EvolutionVirtually Yours, TradieWives, just to name a few.

The Australian Human Rights Commission, which notes the large gap between the superannuation savings of Australian men and women, states that the reason for the disparity in super balances is that the current superannuation system is linked to paid work.

As a result, it overwhelmingly disadvantages women who are more likely to move in and out of paid work to care for family members during varying stages of their lives.

How realistic is GigSuper

Ex-financial planner and best-selling author of Unf*ck your Finances and Budgets Don’t Work (But This Does) Melissa Browne ran the numbers on the real cost of a break-in paying super.

The scenario presented was in comparison to childcare, but any break in paying super has the same effect. In Melissa’s scenarios, the loss in super ranged from $277,449 to $441,797.

By empowering mothers who work for themselves to easily control their own superannuation funds, GigSuper is at the forefront of creating change and closing the worker super gap in general, and the gender super gap in particular.

The self-employed community already has a lot on their plate, from figuring out GST and tax to navigating self-promotion and networking, through to the recent stresses of homeschooling and lockdowns. Superannuation should not be another added headache.

For this reason, GigSuper has been purpose-built for the self-employed, who are being overlooked by other similar employee funds, and structured for full-time employees.

This has led to one of GigSuper’s most popular features. Members get two built-in accounts; a Saver account and a standard Super account to further promote the fund’s popularity. ‍

Members hook up the Saver account to their bank and start saving weekly. They can access the money in their Saver anytime. Then, once quarter money will automatically be transferred from their Saver into their Super to build their retirement savings.

However, if they feel they can’t spare the cash, it can be withdrawn making it perfect for self-employed individuals who must manage varying degrees of fluctuating income.

There are currently 2.2 million self-employed Australians, and the majority are neglecting their superannuation. GigSuper is a game-changing fund designed to help the self-employed double their super, and safeguard what’s likely to be one of their biggest assets in retirement.

More importantly, it’s part of a broader movement to help close the worker and gender gaps in super, with the goal to make work and retirement a little more equitable.