Debt advice for women

Woman and debt

The advice team has reported an alarming rise in calls from woman in debt. In order to help women in debt it is important for Money Advice Direct to know as much as possible about their debt, their financial situation and their lifestyle so advisers can give tailored advice. Woman in debt are put under enormous personal pressure, while their problems also put a strain on relationships with family members.

New methods of data capture have allowed the service to analyse its female client base in more detail. The aim is that it will yield a greater understanding of women in debt. This section will look at the causes of shifting patterns of borrowing amongst women and the impact it has on their lives.

Our ongoing research has shown there were two types of women in debt:-

1. Women in debt hose who had spent the money sustaining a lifestyle that they thought they deserved but could not afford.
2. Women in debt who suffered financially as single mothers or divorcees.

Our statistics have shown that women owe more than men, and this applies to all age groups. The average debt increased for clients and has also seen women outspending men in all of the age categories. Women also have a larger number of debts.

Women tend to owe smaller debts to store card, credit card and catalogue providers. Men tend to have fewer store card and catalogue debts, but more credit card and personal loan debts – which have larger balances.

Bankruptcy and Women

Bankruptcy amongst women is on the increase with 45% more women declared bankrupt each year. Patterns of borrowing are changing too. More women are likely to use credit than men and recent research shows that 1 in 10 women is using over 50% of their salary to repay debt each month.

Many women who are in large amounts of debt are surprisingly deciding to avoid bankruptcy because of the social stigma and opt for an IVA or debt management instead. Other women just battle on and refuse to take debt management advice which utlimatley creates even greater debt problems.

Statistics on woman and debt from The UK Insolvency Helpline

• 60 per cent of the people it recommends to go bankrupt are women - three quarters of these are single.
• Half of these women refuse to take this drastic step, seeing it as a sign of shame and failure.
• Many of the women these are older women who have been plunged into a sudden financial crisis by the break-up of a relationship or job loss.
• Many are single young women who have loaded up credit cards on clothes, partying and holidays.
• Many of these women who fail to follow the advice offered preferring to soldier on, begging and borrowing to make ends meet.
• Many women in debt opt for Individual Voluntary Arrangements(IVAs).
• The average women in debt owe around £30,000.
• Woman in their late twenties have accumulated the most debt.
• Woman aged 25-30 are the age group mostly in debt.

Main reasons that women get in to debt

Many woman found that their debt problem was the result of university education, but this was exacerbated by expensive rent and active social lives. Other reasons are:-

• Debt from Unexpected expenses
• Debt from Relationship breakdown
• Debt from Illness or poor health
• Debt Unemployment or lack of a steady job.
• Over-spending leading to debt.
• Debt from shopping addiction
• Debt after divorce
• Those who have left university and are struggling to find a job.

Money Advice Direct is a national telephone helpline for people with debt problems in England, Scotland and Wales. The service is aims to help people get debt free (subject to terms and conditions) by offering confidential and non-judgemental advice.. The service has existed since 1986 and was set up in conjunction the credit industry. We can be telephoned on 0800 0746918.

The service provides self-help advice to its callers and also produces written self-help packs and fact sheets to back this up. The service can also assist callers with the setting up of Individual Voluntary Arrangements (IVA), Debt Management Plans and Bankruptcy for England & Wales or Scotland.

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