The number of personal insolvencies in the North West Increased for the second year running in 2017 – with women being more likely than men to be affected, according to government figures released today.
They show that over half (55.2%) of those who became insolvent were women, and women in the 25-34 age group had the highest rate of any group in the region.
The figures show that in total there were over 13,800 personal insolvency cases in the North West in 2017 – an insolvency rate of 24.2 per 10,000 population and the third highest in the country after the North East and South West.
Blackpool had the highest rate in the region (38.1), followed by Halton (32.5), Sefton and Burnley (31.1), St Helens (29.8), Hyndburn (29.3), Wirral (28.8), Preston (28.7), and Wigan and Tameside (both 28.5).
An analysis of the figures by R3, the insolvency and restructuring trade body, shows that women tend to use more Debt Relief Orders [DROs], a type of insolvency designed to help people with low incomes, debts, while bankruptcy was more commonly used by men and associated with business failures and higher levels of debt.
Allan Cadman, North West deputy chair of R3 and a partner at partner at Poppleton & Appleby, says the figures reflect the fact that women have a weaker financial position than men.
He said: “Women are much more likely than men to work part-time, and in sectors and roles with lower pay; they are often paid less than men for performing comparable work, as the gender pay gap shows; they are more likely to be single parents, which has a high correlation with greater poverty levels; and they are more likely than men to enter bankruptcy as a result of relationship breakdown.
“A number of factors have increased women’s insolvency rates over the last few years, not least the introduction of Debt Relief Orders [DROs] which have helped those who might not have been able to access an insolvency procedure otherwise.”
Allan said that insolvency rates stayed relatively low across 2017, but with zero hours contracts and the gig economy, having a job was now less of a bulwark against insecurity and insolvency than it used to be.
Coastal towns and post-industrial areas
Allan said that, as with previous years, the places which have the highest rate of personal insolvency tend to be seaside towns or those affected by industrial decline.
“The problems facing seaside towns are well-known,” he said. “Seasonal work dries up over the winter, and when it is available, wages tend to be low. However, the Government launched a £40 million fund in February to encourage investment and boost jobs in coastal communities. The vibrant economies of seaside cities like Brighton show that coastal settlements can become prosperous, given the right conditions.
“Areas where the industry has receded face significant challenges. High levels of individual insolvencies are often accompanied by other issues, like poorer health and education outcomes. We’re still seeing the impact of industrial decline, decades later. Tackling economic malaise will require significant investment in building skills, resilience, business networks, and better infrastructure.
“Regional initiatives, such as the Northern Powerhouse are one way to bring public and private sectors together to boost investment and to build links, and more of a focus on such projects would be welcome news. Projects must also take care to look outside cities and larger towns to places where a spiral of decline has set in.”