Women in the North West are increasingly more likely than men to enter a personal insolvency procedure, according to new figures released by the government’s Insolvency Service.
They show that women in the region have outnumbered men in terms of personal insolvencies in each of the past two years – and the gap is growing. An analysis of the figures by the UK insolvency trade body R3 shows that while the overall number of insolvencies has been falling, the proportion of women in the figures has been steadily increasing.
In 2014, 7,486 women in the North West entered some type of formal insolvency procedure. Women accounted for 53 per cent of insolvencies, compared to 51 per cent the previous year and just 45 per cent in 2009.
Richard Wolff, North West chair of R3 and Head of Corporate Recovery and Insolvency at law firm JMW, said the increase could in part be due to the introduction of Debt Relief Orders (DR) in 2009 to deal with low-value debts. The figures show that women are more likely to be subject to a DRO, while younger women are more likely to be in an IVA (Individual Voluntary Arrangement) which are often linked with consumer debt. Men are more likely to enter bankruptcy.
“The stereotype is that women have traditionally been viewed as more cautious with money and at face value these figures overturn that,” he said. “It may be that women are less likely to stick their head in the sand about debt problems and want to find a way to resolve it, or it could be that low-value and consumer debts have a bigger impact on women’s finances.
“R3 research found that insolvency practitioners are more likely to say consumer debt issues are one of the main causes of insolvencies involving women, whereas business failure was a common cause of insolvencies involving men.
“Certainly men are more likely to go bankrupt, which is often linked to ‘big bang’ personal finance issues like loss of employment or company failure. Bankruptcies have fallen dramatically in the last five years, whereas other types of personal insolvency have remained quite steady.”
Amongst both sexes, people in the 35-44 age group were the most likely to encounter financial problems, followed by those aged 45-54.
In total there were 537 personal insolvencies in Salford in 2014, which was an increase of 25 on the previous year and which represents an insolvency rate of 28.4 per 10,000 population – slightly higher than the North West average of 25.2 per 10,000.
Overall there were 14,145 personal insolvencies in the North West during the year. Seaside towns once again featured heavily amongst the areas with the highest insolvency rates. Blackpool, with an insolvency rate of 37.8, had the highest rate in the North West, followed by Hyndburn with a rate of 31.4, Halton with 31.1, and Wirral and Wigan, both with 29.4.
Richard Wolff added: “The personal insolvency regime remains an effective way to help people deal with their debts and get back on their feet, while at the same time helping creditors recover at least some of what is owed to them.
“Overall personal insolvencies have fallen considerably since their peak several years ago. However these statistics don’t tell us the full story as they don’t include the thousands of people in the region who are in informal debt management plans. As these plans are not officially recorded, there is no way of assessing their impact within the region.”
