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R3 comments on regional and gender insolvency statistics PDF Print E-mail
Monday, 18 July 2016
Commenting on the 2015 personal insolvency statistics published today, Adrian Hyde, vice-president of UK insolvency trade body R3, says: 

Regional Insolvencies
“As in previous years, personal insolvencies are concentrated in the North East and the South West, with a handful of acutely affected towns on the coast. These are areas associated with lower wages and higher unemployment. And where there is employment, it is more likely than elsewhere to be part-time or seasonal work. Over half of the top-10 places with the highest insolvency rates in 2015 were on the coast.”

“These areas show the cost of failing to diversify a local economy. Either local personal finances suffer – sometimes for years afterwards – if a major employer or industry declines rapidly or they suffer because the dominant local sector does not provide enough job security or income.”

Gender insolvencies
“The gap in insolvencies between men and women has grown again. While insolvency numbers are falling, they are continuing to fall faster for men than women.”

“The insolvency statistics reflect the fact that there is, unfortunately, still a large degree of gender inequality in the economy. Women may be more prone to insolvency, but this is probably linked to the fact that they tend to have lower levels of assets or incomes to live on than men. They are also much more likely to be financially dependent on someone else. It’s a lot easier to ‘over-spend’ or be exposed to a financial shock in this situation.”

“When it comes to consumer debts, both men and women seem to have a similar level of difficulty. This is reflected by the Individual Voluntary Arrangement numbers, which are very similar for both men and women. The big differences come with bankruptcies, which men are more likely to enter, and Debt Relief Orders, which women are more likely to enter.”

“DROs are much more common than bankruptcies. Those entering a DRO have low levels of debts, but they also have very low assets and little or no incomes. Women are less likely to be in work, or more likely to be in part-time employment than men. They tend to have lower wages, too.”

“The introduction of DROs in 2009 helped play a part in women ‘catching up’ to men in terms of insolvency: before that many women would have struggled to access an insolvency procedure appropriate to their situation. Access to DROs was widened in late 2015.”

“Bankruptcies are associated with job losses and business failures, which are much less common when the economy isn’t struggling. Bankruptcy numbers have really fallen recently. It’s worth noting that women are much more likely than men to become bankrupt because of a relationship breakdown or their partner losing their job. With rising numbers of female entrepreneurs and rising employment among women this should change, albeit slowly.”

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