Is debt more of a female issue than male?

Why do we get into debt, and what can we do about it?


BEAWA3 Worried woman holding bills and looking at laptop

Are more women in debt than men? Although finding yourself in money troubles can happen to anyone, considering the reasons why is an interesting topic to look at.

Today is International Women's Day – a day to celebrate the achievements of women worldwide. So, while we're on the subject of women, it seems perfect timing to ask the question – are women more likely to feel the pinch?

To help answer this question, we asked Esther at Money Nuggets, a personal finance blog for women, for her thoughts. Read on and see if you agree.

Does debt impact women more than men?

In terms of issues surrounding gender equality, debt is rarely cited as a contributing factor in women's overall financial status. But the reality is that, in the UK, research proves that debt impacts women more than men:

  • Of the 8.8 million people struggling with debt in the UK, 64% are women (Money Advice Service)
  • In 2011, two thirds of declared insolvencies in the UK were women (Payplan)
  • Low paid women are feeling the cost of living crisis sharply: nearly 1 in 2 say they feel worse off now than five years ago, leading to an increase in loans taken out by women (Fawcett).

Four reasons debt is a bigger problem for women

1.Women earn less than men

According to the Fawcett Society, a women's equality charity, women in Britain earn 13.9% less than men.

The gender pay gap can be attributed to various factors including outright discrimination (where women are paid less than men for exactly the same work) and unequal caring responsibilities (women are more likely to care for children and elderly/sick relatives than men – leading to unequal earning potential).

2.Women are more likely to be in lower paid jobs or unemployed

Due to caring responsibilities, women are more likely to work part-time. Part-time work is often to be found in lower skilled or public sector professions (which pay less) – 80% of those working in the care or leisure sector are women.

The Fawcett Society also found of those earning less than the living wage – two thirds are women.

Women are also more likely to work in the public sector and recent austerity cuts have therefore impacted women's earnings further. Additionally, female unemployment has risen to a 25-year high in recent years, while the number of jobless men is falling. Low or zero income makes women more susceptible to debt problems in order to meet the cost of household finances.

3.Childcare costs mean women are less likely to return to work

More than twice as many mothers than fathers have found that returning to work after having a child isn't financially worthwhile, according to the National Childbirth Trust (NCT). This is particularly true for single mothers. The burden of childcare consistently impacts negatively on women's careers, with the cost of childcare meaning that a return to work is not financially viable. To add to this, each year a mother is absent from the workplace, her future wages will fall by 4% (Fawcett Society).

Childcare, low wages and unemployment inevitably leads to more women relying on borrowing to pay the bills.

4.Women struggle more and take longer to pay off debt

Both men and women struggle with debt problems across the UK. However, women take longer to pay off debts and have less income to fall back on in the event of debt crisis.

On top of credit cards and overdrafts, debts such as student loans also hang around longer for women, depleting their income in the long run. Women graduates face 16 years of student debt while men will have paid them off within 11 years, according to the British Household Panel Survey.

This, again, is down to the pay gap and because women are more likely to take time out to bring up a family.

A combination of motherhood and lower future earnings means that not only are women in more debt than men, they will carry debt for longer.

How can you tackle your debt?

One of the more encouraging aspects of female debt issues is that women are more likely than any other group to seek help. Christians Against Poverty, a church-based debt counselling centre, say that 63% of callers are women.

If you are struggling with debt, there are practical steps you can take. No matter how big your debt, there is always something you can do.

Step One:

Write down all your debts, monthly payments and income. Create a budget to reduce spending. Then prioritise your debts.

Step Two:

Seek help. A free and impartial debt charity can help you make a practical plan to help you reduce your debts, without judgment or fees.

This guest post is from Money Nuggets and doesn't necessarily reflect the views of the Money Advice Service. You can find out more about Money Nuggets and what they do on their website.

This article is provided by the Money Advice Service.

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