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Tackling your debts

Women and debt

Posted 07 March 2016

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More women than men are becoming insolvent for the first time ever. This week we’re exploring why this might be, and how you can get out of problem debt.

Here at Debt Advisory Centre we are always seeking to understand our customer’s needs, and the root causes of why they may find themselves needing help with problem debt. To make sure that we are providing the best and most relevant advice possible, we need to identify who our customers are and their changing needs and circumstances. 

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As part of this, we’ve recently conducted research into women and debt, both with 3Gem Research and Insights, as well as using our own experience of dealing with women in debt between January 2013 and January 2016.  

Over the coming week we’re going to post a series of blogs all about women and debt, bringing you the insights and knowledge that we’ve gained through the research. As well as this we, as always, are going to try and give you our best advice on money management and saving, and also how to curb any debts that may already be out of control.

What did the research look at?

The research focussed on the changing role of women in the workplace and the household, and how this may have impacted on the way they approach borrowing, budgeting and money management. We’ve also looked into attitudes to money in general amongst women, honing in on what leads them to make certain decisions, what they prioritise, and who they may turn to for financial advice. We’ve spent time really examining the worrying trend of women, particularly young women, finding themselves in a cycle of debt. 

Why we produced the report

So you may be wondering what led us to look into the issue of women in debt in such detail. Well, according to the Insolvency Services’ data, there are more women applying for debt relief then men for the first time ever. In 2015, 22.2 in every 10,000 adult women in the England and Wales applied for bankruptcy or insolvency (the figure for men was 21.2). Interestingly, the trend seems to be seen most clearly in young women, with 33 out of every 10,000 applying for bankruptcy last year. 

These stats from the Insolvency Service are backed up by our own data. Between January 2013 and January 2016, the percentage of women between the ages of 18-24 seeking help with their debts from Debt Advisory Centre went up from 2% to 11% of all our enquiries. 

Of all the women who approached Debt Advisory Centre in January this year seeking help with their problem debts, 80% of them owed more than £5,000 to their creditors. When you compare that to 67% in the same period in 2013, you can see that it’s not just the number of women in debt that is increasing, but the amount of debt that they are having to deal with too. And, based on our own research, most of the women who we spoke to owed money to at least five creditors at the start of the year.

Why the increase?

There could be any number of reasons why this increase has taken place, but two of the most likely are concerned with working patterns and wages. Even though there has been an increase in companies offering flexible working hours to their staff and affordable childcare, women are still more likely to take time off work to care for children and elderly relatives. 

Another reason why this increase may have occurred is the pay gap between men and women. According to Pay Portal, full-time working men still earn more than women, with men earning £567 per week, compared to £471 for women in April 2015. 

The effect of debt on other aspects of life

What we mustn’t forget is the impact that problem debt can have on the overall wellbeing of both women and men. Over the years, we’ve seen first-hand how the stress of debt, especially when endured over a long period of time, can negatively affect other areas of your life. People in debt suffer high levels of stress, and this can alter your behaviour with your friends, family, and significantly impact how optimistic you feel about your own future prospects.

Hopefully, after our women in debt week, you’ll have learned a few things that you didn’t know before, and you’ll also feel armed with the information you need to take control of your own finances, if you can personally relate to any of the issues that we discuss. 

While it may be true that there is a growing trend of women being debt, this does not mean that being in unmanageable debt is a foregone conclusion for anyone. If you are already dealing with problem debt, there’s always a way out of your situation. 

If you feel like you’re drowning in debt, or you just don’t know the best way to deal with it, make sure you reach out for help by using the options to the left. Our debt advisors are ready and waiting to take your call. 

 

 

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.