More women than men declared insolvent for the first time

New data shows that the number of women applying for debt relief has overtaken men for the first time

Last year 51,472 women were declared insolvent compared to 46,758 men. That’s 22 out of 10,000 women and 21.2 out of 10,000 men.

Overall, the number of people getting into that situation has been falling consistently since 2009. But the latest figures also show a significant rise among younger people.

There were 3,705 insolvencies among 18-24 year olds last year, compared to 3,061 in 2013. A total of 32.8 per 10,000 women aged between 25 and 34 became insolvent, compared to just 24.8 for men of the same age.

The shift is partly explained by the introduction in 2009 of a new debt relief order (DRO), available to those who have a low income, low assets and less than £15,000 of debt. There is no distribution to creditors, and the person is discharged from their debts after a year.

The Insolvency Service, the state body that compiled the figures, said that a higher proportion of individual debtors using DROs were female in comparison with traditional bankruptcies and individual voluntary agreements (IVAs), another option to repay some or all creditors without declaring full insolvency.

“It may be that women are less likely to stick their head in the sand about debt problems; or it could be that low value or consumer debts have a bigger impact on women’s finances than men,” said Phillip Sykes, president of R3, the insolvency trade body.

“Either way it is also a reflection, particularly in the under 35 age group, of women’s rapidly increasing economic activity which is closing the historic gap with their male counterparts.”

R3 has found that 85 per cent of insolvency practitioners said consumer debts were a leading factor in female applications, compared to 75 per cent for men.

By contrast, 83 per cent said that the collapse of a company was a major factor in male insolvencies, compared to just 32 per cent who agreed it was a big factor for women.

“Before DROs were introduced, many people would not have been able to meet the entry requirements for other insolvency options,” said R3.

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