Female Insolvencies on the increase

Increasing Insolvency levels for young women
Payday lenders and other expensive credit providers who are ‘ruthlessly targeting’ young women could be behind the growing proportion of women being declared insolvent.

Women accounted for around 49 per cent of personal insolvencies in 2011 and 2012, according to Insolvency Service data, and Data Advice Foundation analysis suggests that women will outstrip men during 2013.

It comes as the latest insolvency figures for the first quarter of 2013 showed that the number of people being declared bankrupt, subject to debt relief orders, or on an individual voluntary agreement has fallen.

But the proportion of women who can’t afford to pay off their debts is rising, with the foundation suggesting that access to expensive credit – such as from payday lenders – is much easier now than it was before.

Chief executive David Rodger said: ‘What we know for certain is that a generation ago, it was difficult for a woman to get any kind of a loan, and married women would routinely be expected to ask their husbands to co-sign a hire purchase agreement.

‘Today, by contrast, short-term loan companies are targeting young women ruthlessly, with marketing campaigns suggesting that they have an entitlement to a wide range of non-essential consumer goods, whether they can afford them or not.

Young people are not being taught the basics of working out a personal budget; they are not being given the tools to help them understand their own financial position.

‘And without this knowledge, they are more susceptible to unscrupulous marketers and struggle to deal with today’s complex and confusing financial landscape.’

Women accounted for just 30 per cent of personal insolvencies in 2000, but this rose to almost half in 2011.

Worryingly, women are more likely to run into trouble at a younger age, account for two-thirds of those aged 18 to 24 declared insolvent.

The foundation has suggested that as well as the availability of credit, differences in pay or attitudes to debt could also be behind the figures.

Mr Rodger said: ‘We could be seeing the fallout from a continuing gender pay disparity, or women could well be tackling their debt problems at an earlier stage than men.

‘Our experience is also that women are more likely to pick up the phone and ask for help than men.’

While women are catching up with men in terms of overall insolvency, the fact that more men are declared bankrupt while more women are subject to debt relief orders suggests that the level of debt is higher among men.

Debt relief orders work in the same was as bankruptcy in that debts that cannot be repaid are wiped clear after 12 months, but they are cheaper to obtain and are available to those with debts of less than £15,000.


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