PracticeAccounting FirmsDramatic rise in bankruptcies among women

Dramatic rise in bankruptcies among women

Survey reveals true cost of financial independence for women

Some 42% of bankrupts are now women, almost a third more than there were five years ago. According to a study by accountancy firm Wilkins Kennedy, women’s growing financial independence combined with their generally lower salaries, has led to a dramatic rise in unmanageable credit card and mortgage-related debt.

Link: UK under ‘black cloud’ of debt

Keith Stevens, insolvency partner at Wilkins Kennedy, said: ‘The root of the problem is that women have seen the rapid growth in their financial independence outstrip the rise in their incomes. The gap between incomes is narrowing but women are taking on more financial burdons.

‘We are seeing a big increase in the number of women going through the bankruptcy process with credit card debt, and a high proportion of these are young single women.’

Mortgages have also played a large part in the rise. Research by the Halifax shows that the proportion of new mortgages taken out by single women has more than doubled in the last 20 years and now accounts for 23% of the total market.

‘A lot of women have mortgages and have had to borrow at very high multiples of their income to get on the housing ladder,’ said Stevens

According to Wilkins Kennedy, the rise in the number of single women supporting children on their own, often with little financial assistance, is another significant factor.

Data from National Statistics shows that the percentage of families headed by lone mothers has risen from 7% in 1971 to 24% in 2005.

‘The conflict between trying to bring up children on your own and paying for this through a career is huge. Lone parent families are often among the most financially vulnerable in the UK,’ said Stevens.

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