Women who are 65+ in coastal towns face the greatest debt challenges, insolvency statistics show. Scottish Trust Deed compares the data for England and Wales with Scotland.
Individual Voluntary Arrangements (IVAs) are a route out of debt for anyone who meets the IVA qualifying criteria. But as the latest government report into insolvencies by age and gender shows, some people in certain parts of the UK are far more likely to need them than others.
What do we mean by insolvency?
Insolvency simply means your outgoings exceed your income in an unmanageable way. A person becomes part of the insolvency statistics when their insolvency is registered, either because they have been declared bankrupt, have taken an IVA or are subject to a DRO (Debt Relief Order).
In England and Wales, there’s a clear regional split between the areas with the most and least insolvencies. All ten of the places with the lowest insolvency rates are in London and the South East.
In contrast, six of the 10 areas with the highest insolvency rates are on the coast. From Scarborough to Torbay, Plymouth to Blackpool, the data shows people in these areas are almost twice as likely to be insolvent than the national average, and four times as likely to be insolvent compared with the best-performing areas.
Some of these areas don’t, perhaps, come as a surprise. Blackpool is frequently top (or bottom, depending on how you look at it) of many a social mobility, poverty or employment table. But many other coastal resorts – even more affluent destinations such as Torbay – are experiencing the same debt issues.
Why do more IVAs occur on the coast?
The popularity of overseas holidays, the collapse of traditional industries and seasonal work have all been blamed for the problems faced in coastal areas, but a far simpler explanation is that the coast attracts those whose life didn’t go the way they planned, and who have happy associations with the area.
In 2017, Dr Arif Rajpura, Blackpool’s director of public health, told the FT: “People have a positive association from their childhood . . . When something’s not gone right in their lives, [when] there’s a problem, [when] they’re running away from something, then people do tend to come to Blackpool.”
As the FT reports, coastal towns have become net exporters of good health and skilled labour and net importers of “ill health, unemployment and precarious labour” – all of which can be a direct route into IVAs and other forms of insolvency.
Women more likely to be insolvent than men
Traditionally, men were far more likely than women to be insolvent. In 2008, as the Guardian reported, the male insolvency rate was 56% higher than for women. Today women apply for 14% more insolvencies than men. In the latest figures, insolvencies were running at 26.6 per 10,000 adult women against 23.3 for adult men – and the gender gap is widening.
That’s not to say that women haven’t always been dealing with debt, but the routes out of debt that were suitable for men didn’t suit women. As the FT notes, the prime driver for insolvency in men is business failure. For women it is relationship breakdown. Bankruptcy worked for men. It was far less appropriate for the circumstances of women.
The rise of IVAs and DROs has given more women a viable route out of debt, and many more are choosing to take it.
Over-65s most likely to face insolvency
If women now account for more IVAs and other insolvency routes than men, the picture is even more stark if you’re over 65. Insolvencies by women rose in every age group between 2008 and 2018, but in those aged 65+ the increase was a staggering 88%.
Why are older people, and older women in particular, facing the greatest insolvency issues?
Stuart Lewis, founder of Rest Less told the Guardian that older people were, “…more likely to be made redundant, to be in long-term unemployment and to face age discrimination in the recruitment process.” He went on to point the finger at “the wide gulf in private pension savings between men and women” and added that, “women in their 50s and 60s are also more likely to have taken time out of the workplace and to have caring responsibilities, whether for elder relatives, partners or grandchildren.”
The debt picture in Scotland
Insolvency in Scotland is handled by the Accountant in Bankruptcy. There are no figures which break down insolvency by gender or coastal authority in Scotland, but latest figures do show that overall averages are higher than for the rest of the UK. Personal insolvencies (that is, sequestrations (bankruptcies) and protected trust deeds) stood at 28.3 per 10,000 adults.
Can I get an IVA in Scotland?
No, but you can apply for a Scottish trust deed. These are often called ‘Scottish IVAs’ although trust deeds are not IVAs and there are numerous differences between the two.
It’s not easy to face debt, but you’re not alone. As the data shows, if you’re a woman, if you’re over 65, if you live on the coast or in Scotland, you are statistically far more likely to be in unmanageable debt. But help is available. To access it, talk to us.
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