Personal insolvencies more common among woman, coastal dwellers and those in North East

Personal insolvencies are more common among woman, people who live by the sea or people living in the north east, according to 2018 statistics.

Gender

During 2018 in England and Wales, more woman than men became insolvent, following a pattern that insolvency trade body R3 say has been in place for years.

Mark Sands, Chair of R3’s Personal Insolvency Committee, said:“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.”

The 2018 statistics show that 54.3% of insolvencies involved a woman, which was a 30% increase from 2000 and 53.9% from 2017.

The key gender-specific statistics in the report picked out by R3 were:

• 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.
• Women were involved in 65% of Debt Relief Orders, 54% of Individual Voluntary Arrangements, and 38% of bankruptcies.
• Women aged between 25-34 were the group with the highest personal insolvency rate in 2018, at 49.9 per 10,000. They were followed by women aged 35-44 (47.5 per 10,000), and men aged 35-44 (40.7 per 10,000).
• 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. IVAs jumped by 20% year on year, and overall, individual insolvency numbers rose by 16% in 2018 compared with 2017.

Regional

The geographical spread of the statistics also shows that the North East and coastal towns such as Torbay and Blackpool typically had the highest concentration of personal insolvencies, with Stoke on Trent being the local authority with the highest rate.

High levels of personal insolvency in a single area suggest a wider problem of deprivation, and highlights the need for better services to be introduced to a place, such as debt advice services.

On the regional statistics shown in the report, Mark Sands said: “Coastal areas often have higher rates of personal insolvency than inland areas.

“As places which often depend on an influx of tourists in the summer months for income, they are dependent on the consumer pound, which has been in shorter supply of late.

“The seasonal nature of tourism-related work makes it hard for many residents to build up savings to last them in leaner times, leaving them vulnerable to the type of economic shock that can often trigger insolvency.”

The rate of customer debt has slowed, but the amount owed by individuals is rising with the inflation-adjusted employees’ earnings remaining lower than before the 2008-09 recession.

“Ensuring that people in problem debt are aware of their options, and that they can access a suitable form of personal insolvency if that is the best option for them, should be a priority for the Government,” added Sands.

Local Authority (Highests rate of insolvency) and Insolvencies per 10,000 adults

Local Authority (Lowest rates of insolvency) and Insolvencies per 10,000 adults

In 2016, the government also published statistics on the 17 causes of bankruptcy in 2015 as categorised by the Insolvency Service and broken down by gender. The statistics showed that:

• 34% of men’s bankruptcies in 2015 were caused by the bankrupt’s own company running into financial problems, compared to 13% of women’s bankruptcies (26% for all adults).
• The most common single cause of men’s bankruptcies in 2015 was ‘living beyond means’ (approx. 995 bankruptcies), closely followed by ‘management failure’ at their own company (990), and the bankrupt’s loss of their job (920).
• The most common single cause of women’s bankruptcies in 2015 was ‘living beyond means’ (1,110), ‘relationship breakdown’ (1,075), and the loss of or a significant reduction in household income (750).