In Focus Consumer Credit
‘Personal insolvencies more common among women’
Economic pressures are leading to different forms of insolvency, as well as significant regional variations
Mark Sands Chair, R3’s Personal Insolvency Committee
More women than men in England and Wales became insolvent in 2018, following a pattern which has been in place for several years, or so suggest the annual personal insolvency statistics released last month by the Insolvency Service. Looking at the geographical spread in the
statistics, the North East and coastal towns, such as Torbay and Blackpool, typically had the highest concentrations of personal insolvencies, also following the pattern established in recent years. Stoke-on-Trent is once again the local authority with the highest rates of personal insolvencies. The 2018 statistics show that 54.3% of
insolvencies involved a woman, up from 30% in 2000 and 53.9% in 2017.
Gender There were 26.6 insolvencies per 10,000 women in 2018 compared to 23.3 insolvencies per 10,000 men. There were 25 insolvencies per 10,000 for all adults. Also: lWomen were involved in 65% of debt- relief orders (DRO), 54% of individual voluntary arrangements (IVA), and 38% of bankruptcies. lWomen aged between 25 and 34 were the group with the highest personal- insolvency rate in 2018, at 49.9 per 10,000. They were followed by women aged 35 to 44 (47.5 per 10,000), and men aged 35 to 44 (40.7 per 10,000). l The number of DROs taken out in 2018 rose by around 11% compared with 2017, while the number of bankruptcies rose by 10% year on year.
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The gender split in insolvency is a sober reminder that women are more likely to be economically disadvantaged than men; they are more likely to work part-time, or in generally lower-paid sectors. Women are also more prone to becoming insolvent following the breakdown of a relationship than men, as the Insolvency Service found several years ago when it looked into the reasons why people became bankrupt
IVAs jumped by 20% year on year, and
overall, individual insolvency numbers rose by 16% in 2018 compared with 2017. The gender split in insolvency is a sober
reminder that women are more likely to be economically disadvantaged than men; they are more likely to work part-time, or in generally lower-paid sectors. Women are also more prone to becoming insolvent following the breakdown of a relationship than men, as the Insolvency Service found several years ago when it looked into the reasons why people became bankrupt. Being a single parent also correlates
strongly with financial hardship, and women make up the great majority of single parents. This April marked the tenth anniversary
of the introduction of DROs. Designed to be used by people with lower
asset levels, smaller debts, and a low level of disposable income, the DRO has established itself over the past decade as a useful debt-forgiveness tool for people who do not have enough income to agree an IVA, and for those who cannot afford the £680 to become bankrupt, or whose lower levels of assets would make a bankruptcy less viable. The introduction of DROs is a major
reason why women reversed the ‘gender gap’ in insolvencies: DROs are more common than bankruptcies – albeit far less well-known – and the gender split of people entering DROs is heavily weighted towards women. This links back to the generally more precarious state of women’s finances, as
www.CCRMagazine.com September 2019
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