Moore Stephens says that women accounted for 65% of personal insolvencies amongst the under 25s in the last year. Women also accounted for 53% of all personal insolvencies amongst 25 to 34 year olds. Moore Stephens says that the gender pay gap may be partially to blame. Women earn, on average, 18% less than their male counterparts, but they still face the same, or higher expenses. This can lead to women taking on higher levels of credit card debt in order to make ends meet. Moore Stephens says that young women spend more on accommodation than young men, as they are less likely to live at home with their parents. Recent ONS data shows that one in three young men live at home, compared to just one in five young women.
With a higher proportion of renters and first time homeowners than young men, young women have been much more exposed to the rapid inflation in house prices and rents over the last decade. Last year, rents rose 18% in Bristol and Brighton, 16% in Newcastle and Edinburgh, and 11% in London, while house prices rose 8.1% in the year to the end of May 2016.
Young women can also face greater pressure than men to maintain higher levels of spending on consumer goods. They are far more frequently targeted by luxury brands selling expensive designer goods than men, while aggressive marketing by the fashion industry has also successfully shortened the cycle through which fashion lines go in and out of style – increasing the pressure to spend.
Jeremy Willmont, Head of Restructuring and Insolvency at Moore Stephens, says: “With lower wages and higher expenses, some young women are more likely to find themselves insolvent than young men. Whilst fewer women are becoming insolvent overall as unemployment and interest rates stay low, they are making up a markedly higher percentage of insolvencies than men. Rental and house price inflation has been particularly aggressive over the last few years. As young women are more likely to rent than young men, they are seeing ever greater chunks of their income swallowed up by accommodation costs.
“Women are also a particular target for payday lenders, who have been criticised in the past for encouraging women to take out high interest loans in order to pay for luxuries they otherwise couldn’t afford. Nobody is saying that young women are less responsible than young men, however. There is even a chance that these statistics may even up in the future as more lifestyle products are marketed at young men.”