In 1958, BNZ opened The Ladies Bank. Two days later, a strip cartoon in the New Zealand Herald showed men making deposits in one side of the bank, and ladies withdrawing all that money on the other side.

Men make money, the cartoon implied, and all women do is spend it. Even at the time the bank pushed back and said the cartoon was outdated. But nearly 65 years later, women still haven’t yet been able to bridge the financial gap with men.

Women in Aotearoa make less money, have lower KiwiSaver balances, and end up with less in retirement compared to men. They’re more likely to be in poverty in old age, and to struggle financially after a relationship break-up.

The reasons are complex – a mix of behaviours and biases, choices and stereotypes. It’s impossible to untangle the interaction between the contributing factors. And ideas about roles within households, from the days when men doled out housekeeping money to their wives, still seem to cast their shadow.

“Our research finds that women are really good at household budgeting, but less confident when it comes to investing and taking risk,” says Jane Wrightson, Retirement Commissioner at Te Ara Ahunga Ora. “My earliest money memory is asking my mother for pocket money, and I had to budget that to buy my own clothes. And anyone of a certain age will remember the Post Office savings books we had at school. So I’ve always known how to budget – but do I know how to take risk? That’s been the big lesson for me: understanding risk and not being afraid of it.”

It’s not about gender

Women do take less risk in their investments, including their KiwiSaver accounts. But the reason is simple, according to the New Zealand Society of Actuaries: women have lower balances. How much risk we take with our funds isn’t about gender, it’s about how much money we have – and women tend to have less. Among men aged 45 to 64, 13 per cent have KiwiSaver balances of $100,000 or more, compared with 6 per cent of women.

Because people with more money take more risks, their gains tend to compound, and their money grows more aggressively. Those with less money take less risk, resulting in lower lifetime returns. Women retire with less, then live longer, so they need to make less money last longer. More than twice as many women as men live in poverty over the age of 65, according to 2019 research by the University of Auckland.

All these financial gaps – in risk, KiwiSaver balances and retirement outcomes – are symptoms of women earning less over their lifetime. Women in New Zealand earn 9.1 per cent less than men per hour. On the international stage that’s very respectable; the WEF ranked us fourth on the lowest pay gap leader board, behind Iceland, Finland and Norway. Australia was 50th and its pay gap is currently 14.1 per cent.

We’ve made great strides – in 1998 the gender pay gap was 16.2 per cent – but progress has slowed over the past five years. And even a relatively small gap accumulates over a lifetime to create a massive earnings gulf between the genders.

“Women, over their lifetimes, earn $888,000 less than men,” says Jan Tinetti, Minister for Women. “The first time I said that out loud I was in a meeting with the Japanese Prime Minister’s chief adviser on women. I turned to one of my team and said, ‘Have I got that right?’ It’s a huge amount. I was horrified.”

Many factors contribute to the pay gap, Tinetti says: “It reflects employment pathways, time-out patterns and occupational segregation. Real barriers still exist for women – they tend to take on childcare, for example, and caring for elderly parents.”

The motherhood penalty

Children are expensive, and childbirth is painful, but it might be the hidden costs of motherhood that hurt women most. Women experience a significant pay drop after the birth of their first child, and 10 years later their pay has not recovered. There was no impact on men’s pay when they became fathers.

The gender pay gap is widest between parents – 2018 Ministry for Women research found that mums earned 12.5 per cent less across their working lifetimes than dads and non-parents. Taking time out of the workforce has knock-on effects – women may miss out on promotion, they miss out on contributing to KiwiSaver, and they’re more financially vulnerable if their partnership ends.

The burden of caring, whether it’s kids or elderly relatives, can also hold women back even when they’re working full-time. Single mum Erica is 42 and lives in Auckland with her 10-year-old son, Max*. She has been with the same employer for 11 years. Erica knows she could earn a lot more at another employer because she is often approached on LinkedIn by other employers.

“I have done a couple of interviews,” she says. “But I haven’t taken any of the jobs because I just couldn’t get the flexibility I have here [at her current employer]. My ex has moved in with his new partner and her kids in Whangārei, so he’s not here to pick up Max, and Max does heaps of sports, so basically I have to do all the running around and everything.”

When it comes to her career, feeling self-conscious about her hours and prioritising her son means Erica is putting the brakes on. She feels sheepish about asking for pay rises because she arrives later than her colleagues and often leaves early: “I can’t risk losing this level of flexibility, so I try not to make waves.”

Max lives with her full-time, and the idea that her ex might care for Max makes her laugh: “Not a chance. We never even discussed it when we broke up. In the early days my ex did a lot more with Max, but that’s tailed off since he moved. As soon as we separated, it was just assumed that I would be the one taking care of Max.”

Supportive partner makes a difference

The expectation that mothers will be the ones to put their careers on the back burner is damaging to women’s financial prospects, and Covid only made it worse. The lockdowns of 2020 and 2021 were particularly tough on mothers of young children, with the OECD’s Caregiving in Crisis research finding mothers were three times as likely as fathers to take on unpaid childcare during lockdowns.

“Working from home is a double-edged sword for women,” says Sharon Zollner, chief economist of ANZ. “In some relationships there’s an inequality of expectations – the woman will be the one to work from home if the child is sick. There’s an unequal relationship in terms of expectation of dropping work. Every couple has to work it out for themselves, but women in that kind of relationship may be feeling frustrated.”

Zollner says her own career success has been supported by a series of excellent employers and a supportive husband. It’s been a team effort to bring in money and raise their children, with each person stepping up at different times in their relationship.

“My husband agreed to move to working part-time when I took on this job. He stepped up and took the lead at home – for me that was huge. Without his support it would have been much, much harder for me to agree to do this job. I worked part-time for years, and I didn’t feel bad about spending his money at all, now it’s the other way round!”

Benefits potentially enormous

The benefits of closing the financial gender gap are potentially enormous. Champions for Change estimates that if women made up 50 per cent of our workforce (up from the current 47 per cent), that would generate an additional $20 billion to $40 billion in GDP by 2030.

At an individual level, improving financial outcomes for women keeps Kiwi women and children out of poverty. That’s one major driver of Tinetti’s Women’s Employment Action Plan, which aims to increase women’s financial security, make the labour market more inclusive, and support women in paid and unpaid work, including caring. And the impact is inter-generational – when women have better financial outcomes they lift their children up with them.

If you’re reading this it’s likely you’re already knowledgeable in the financial sphere, so don’t keep your knowledge to yourself. Talk to women in your life about money and investing. Ask them if they think they’re in the right type of KiwiSaver fund. Or do something practical; help them set up a Sharesies account or practice negotiating for a pay rise.

Even for Wrightson, with a successful career in media under her belt, taking on a role with a financial focus was an eye-opener.

“Before taking this job, I thought I was doing fine. It had never occurred to me that I could have done better with my money, but now I know that I’ve ended up with a little less than I could have. I’ve improved my risk profile. The earlier you start, the more you can achieve – knowledge is power.”

*Names withheld.