| Number of women bankrupts almost double in 5 years: Research |
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A recent study by an accountants firm has shown a jump of more than 40% in the number of women bankrupts in the past five years.
The accountants firm Wilkins Kennedy, conducted the research and analysed over 800 bankrupt cases across England and Wales. An unexpected 42% of these bankrutcy cases were women.
The firm’s report attributes the increase to a combination of reasons: heavy spending on credit cards, mortgages and lower income than their male colleagues. Credit cards, particularly, deserve a large portion of the blame if one were to go by another survey done by consumer group Which? recently.
Which? reported that credit card companies targeted women with marketing material that was designed to influence their spending patterns. A spokesperson of Which? said “Women are generally susceptible to tactics that promise an improved lifestyle and comforts. As a result they are easily lured into the habit of ‘buy-today-pay-tomorrow’.” She said the consumers association was concerned about the trend.
Some blame is due also to the current practice of transferring credit card balance from one provider to another who offers zero per cent interest rates. Men resorted to this as well but women were more likely to do so. Women would be better advised to make minor adjustments in their standard of living; instead they choose to live beyond their means and end up each month with a higher stack of new credit card bills. When the zero per cent grace period expires, their debts catch up with them.
Keith Stevens, insolvency partner at the accountants firm felt that women were inclined to spend more than men, which also factored for the increase in women bankrupts. His clientele included women who had between 30 and 40 credit cards; some had run up debts of up to £100,000 despite earning just £25,000.
In the late 1970s, when he had just started work in the insolvency industry, women with financial problems were unheard of. Today a large number of bankrupt women were young single women. He advised women to moderate their spending in the short term and take fewer financial risks than they currently are.
Debt was traditionally a male thing. With time and cultural changes, the gap between men and women is rapidly closing. Today it is common to see both men and women with debts from £40,000 to £50,000. A considerable number of women even have six-figure debts; and this does not include mortgages. Most consumer groups agree with the view that women risk bankruptcy by heavy spending and taking on too much debt.
Mortgages too played an important role in pushing up the number of women bankrupts. The number of women mortgagors had more than doubled during the last two decades and today they account for nearly 25 per cent of the total mortgage market, according to a survey by Halifax.
The National Savings & Investments (NSI) also conducted a survey whose findings confirm the trend noted by Wilkins Kennedy. The NSI found that women typically had smaller savings because of lower income than men. It also meant they had less to fall back on and their emergency cash reserves have already been exhausted when debts began to spiral out of control.
Another factor to the development could be changes in the law which makes it easier for people with heavy debt burdens to choose bankruptcy as a way to end their problems. A total of 13,229 bankrupt cases were reported in the first quarter of this year, in England and Wales.
Posted
on : Tue, 17 May 2005 16:05 GMT | Debt News
By : Paula Jenkins
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