Female insolvencies reach all time high

The proportion of women hitting the financial buffers is rising alarmingly, according to figures from RSM Tenon, the UK’s 7th largest accountancy and professional services firm.

In the second quarter of 2011, 14,827 women were declared bankrupt, obtained a debt relief order or took out an individual voluntary arrangement. As a result, women now account for 48 per cent of personal insolvencies – the highest proportion since RSM Tenon began recording the figures in 2007, and believed to be the highest ever.

Women now outnumber men in the youngest age groups (18-25 and 26-35) showing that this trend is set to continue into the future. Some studies suggest that as recently as 2002, the women constituted just 32 per cent of bankruptcies.

Mark Sands, Head of Personal Insolvency at RSM Tenon, said: “People blame female money troubles on almost everything from a culture of consumption to alleged ‘bankruptcy role models’ such as Kerry Katona. However, the picture is more complicated than that.

“On the one hand, spending habits and attitudes to debt have changed over the past generation at the same time that women have achieved ever greater levels of financial independence. As women become more and more independent, lenders see them as a more and more lucrative market. So, although it’s not the whole story, there’s an element of truth that the offer of buying handbags with pricey store cards is sending more and more women bust.

“On the other hand, the recent rise in the proportion of female insolvencies began in the second quarter of 2009 and the figures have climbed steadily ever since. So, arguably the UK’s recent financial crisis has hit women’s pockets harder than men’s.

“Certainly, in the early part of the recession, more women than men were made redundant, and some studies have claimed that government spending cuts instituted during the recovery period have a disproportionate effect on single parents – nine out of ten of whom are female. Also, more women than men work part-time, and in a downturn, part-time and shift workers are more likely to be cut.

“So, across the board, women are caught in a pincer movement which leaves them more vulnerable, either to sending themselves into insolvency by financial mismanagement, or to being forced into insolvency by poverty.”

Source: www.creditman.co.uk