Generation of young women face insolvency

Thomas Goos/DPA

Half of Britons being plunged into insolvency are women - the highest proportion since records began - a report has revealed.

The report, from accountancy firm RSM Tenon, predicts official figures (due to be published tomorrow) will show women account for almost 50 percent of all insolvencies in England and Wales for the first time in history.

Women pay the biggest price for the recession
With thousands of women loosing their jobs, experts fear that these figures are proof that women have paid the heaviest price in the recession.

More than one million women in Britain are unemployed, with numbers growing by around 500 a day, amid warnings of worse to come. Many women who do have a job are frustrated because they have been forced into part-time work, which is typically badly paid.
Women also account for around two-thirds of the State workforce, which means they have been more affected by the Government's cull of the public sector, and the two-year pay freeze state workers face if they earn more than £21,000.

The report predicts tomorrow's figures will show women make up a record 49.2 percent of all insolvencies. These include bankruptcies, individual voluntary arrangements and a new type of insolvency called a debt relief order.
The rise is being driven by young women in financial difficulty – they make up 65 percent of insolvencies in the 18 to 25-year-old age group, and 54 percent of the 26 to 35-year-olds.
Mark Sands, head of personal insolvency at RSM Tenon, said it was a 'bleak day for female credit ratings up and down the UK'. He said many victims were simply 'struggling more than ever to survive against the bleak economic climate'.
The combination of the cost of living rocketing, and the majority of pay rises far below the consumer prices index measure of inflation - currently 5.2 per cent, the highest level since records began - is playing it's part in this new crisis for women.

A new trend
Mr Sands said some women had been 'burying their head in the sand' during the recession, but were suddenly having to face the cruel reality of their financial crisis. Women bankrupts were 'virtually unheard of' in the 1980s when he joined the industry, he said.

Una Farrell of the Consumer Credit Counselling Service, said: 'There is a new generation of female bankrupts.

'Women used to only become insolvent as a result of a major life event, such as marriage breakdown or ill health. Now household budget pressures such as inflation, welfare benefit changes, wage freezes and reduced working hours, are pushing them into bankruptcy. It is insolvency by a thousand budget cuts.'
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