Female bankruptcy soars to record high: Recession hits women 3 times harder than men

Women are being hit the hardest by Britain’s economic meltdown, figures have revealed.

The number being plunged into insolvency in just one year has soared to an all-time record of nearly 65,000, a staggering 175 a day.

And the crisis among women is ballooning nearly three times faster than it is for men, according to research based on official figures from the Government’s Insolvency Service.

Female insolvency numbers jumped by 22 per cent in the 12 months to August 31, compared to the previous year.

By comparison the number of insolvent men rose by eight per cent, to 75,111.

Experts warn women are paying the price for trying to maintain a standard of living they simply cannot afford.

In the most extreme cases they have tried to emulate the lavish lifestyle of footballers’ wives and girlfriends, taking on debts which are far bigger than their salary.

These include those with ‘extreme debt’, a debt-to-income ratio of greater than 66:1.

Mark Sands, national head of bankruptcy at accountants RSM Tenon, had a warning to ladies who like to splash their cash.

He said: ‘These are women who are borrowing to pay for a good lifestyle, rather than borrowing money to invest.

The vast majority of all these insolvencies is driven by people living beyond their means.’

Of 64,035 insolvent women, just over 45,000 are aged between 25 and 49.

More than a million women in Britain are unemployed, according to official figures from the Office for National Statistics.

This is the highest for 17 years, with the number expected to keep rising as the impact of this week’s spending review takes effect.

Economists predict unemployment, currently 2.44million – down 20,000 over the last three months – is on the brink of rising again.

Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, expects it will soar to 2.9 million in 2012.

There are three different types of personal insolvency – bankruptcy, which is the most popular option, debt relief orders and individual voluntary arrangements.

The debt relief order is popular with women as it costs just £90 and does not involve appearing in court.

To qualify they must have debts of less than £15,000 and disposable income of no more than £50 a month.

The Consumer Credit Counselling Service said the majority of its clients declaring themselves bankrupt are women.

A spokesman for the debt charity said: ‘Their problems are caused by a significant life change, such as a relationship breakdown, the loss of a job or a serious illness.’

CASE STUDY

Rosie Hamilton-McGinty (pictured) went bankrupt after losing £500,000 in her buy-to-let business.

She also lost her home – a £470,000 luxury two-bed flat.
The 62-year-old, who has two grown-up sons, said:

‘Bankruptcy was by far the most stressful experience of my life. The repercussions are far-reaching.’
Miss Hamilton-McGinty had built up buy-to-let investments in Winchester, Hampshire, with an income of £50,000 a year.

In 2007, after deciding it was too much to cope with, she decided to sell up.

However when her buyer suddenly pulled out, the effect was catastrophic.

‘I couldn’t even afford to pay the mortgage on my own flat,’ she recalled.

‘At one point I had run up debts of about £100,000 as I borrowed from everywhere possible to try to pay the mortgages.’ With arrears building, her properties and home were repossessed.

‘It was utterly devastating. I’d always loved eating in good restaurants and buying classic clothes,’ she said.

‘I thought nothing of treating myself to wonderful holidays.

‘But with barely a penny to my name, I ended up living with friends.’

On her disastrous investment she said: ‘Perhaps I did spread myself too thinly and took on more than I could manage.

‘But I was also badly advised financially by the banks.’

Today, after friends helped her with the deposit on her rented flat, she earns approximately £12,000 from book writing and a self-help website, A Winning Attitude.

‘I used to think it was important to have money but with a simpler life and no deby, I’m much happier,’ she said.