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Women, coastal towns and North East have the highest rates of insolvency – R3 comments on 2016 statistics

The government’s latest insolvency statistics show that women continue to be more likely than men to enter an insolvency procedure and that insolvencies are most common in coastal towns, the North East and towns with declining industries, says insolvency and restructuring trade body R3.

The 2016 statistics, published this morning, show that 53.4% of insolvencies involved a woman, up from 30% in 2000 and 53% in 2015.


  • There were 20.6 insolvencies per 10,000 women in 2016 compared to 18.7 insolvencies per 10,000 men. There were 19.7 insolvencies per 10,000 for all adults.
  • Women were involved in 65% of Debt Relief Orders, 52% of Individual Voluntary Arrangements, and 39% of bankruptcies.

Mark Sands, chair of R3’s Personal Insolvency Committee, comments:

“The gap in insolvencies between men and women is becoming entrenched, with women consistently more likely than men to enter an insolvency procedure.

“However, it would be reductive to say that this is simply because women are profligate compared to men. The insolvency procedure often associated with consumer spending – an Individual Voluntary Arrangement – is used by men and women to roughly the same degree.

Mark Sands explains: “The big differences come when you look at Debt Relief Orders (DROs) and bankruptcies. Women are much more likely than men to use a DRO, which is designed to help people with assets under £1,000 unable to pay even low value debts.

“It’s very easy to ‘over-spend’ if you don’t have much money available to you in the first place. Penalties like unauthorised overdraft charges or missed payment fees can become a problem and can keep people in a debt spiral. Lower incomes and employment levels mean women are more likely to be vulnerable to financial shocks and have less room for financial manoeuvre than men. As women make up the majority of the public sector workforce, they will also have been disproportionately affected by the public sector pay cap.”

“Men, on the other hand, are more likely than women to be affected by bankruptcy, the least common type of insolvency procedure. Bankruptcies can be used to deal with larger value assets or debts, and Insolvency Service statistics link them to events like an individual’s company failing or the loss of their job.

Mark Sands adds: “Given men are more likely to own their own business or be in full-time employment, it’s not a surprise that men use bankruptcy more. With a growing economy, bankruptcy numbers have been dropping steadily since 2009-10, which has helped insolvency rates fall faster in the medium-term for men than women.

“A key factor behind the fact that women were involved in under a third of insolvencies in 2000 but over half now is that, over the last decade or so, the insolvency framework has become more accessible and effective at dealing with different types of problem debt. This has made insolvency numbers more accurately reflect existing financial inequality between men and women.

“DROs, for example, weren’t introduced until 2009 and before then many insolvent individuals with low value debts and assets – predominantly women – may not have been able to access a statutory insolvency procedure which would help them deal with their debts.

“One of the reasons insolvency rates increased faster for women than men in 2016 were the changes to the DRO access thresholds at the end of 2015. These changes meant more DROs, which meant proportionally more female insolvencies.”

In 2015, the debt and asset limits for entering a DRO were raised from £15,000 to £20,000 and £300 to £1,000 respectively.

Mark Sands adds: “It may also have been the case that some women have ‘caught up’ to men – but not overtaken them – in terms of consumer debts as women’s employment and income levels increased and society has changed. The gap has closed with IVAs in a way that it hasn’t with bankruptcies and DROs, for example.

“If female employment, income and entrepreneurship levels continue to grow, we would expect to see women’s insolvency levels for bankruptcies and DROs become more in line with the men’s figures, too.”


Mark Sands comments: “The latest regional personal insolvency statistics follow a very established pattern: insolvency rates are typically highest on the coast, in places where major industries have declined, and in the North East – where these two factors are often combined. The regional contrasts between places like the South East and elsewhere are sharp.

“Coastal towns often have lower wages and higher levels of unemployment. The dominance of the tourist trade means available jobs are often low paid, part-time, or seasonal. This makes personal finances vulnerable to short-term shocks.

Mark Sands adds: “Other places like Stoke or the North East show the long-term effects that the decline of industry in recent decades is still having.

“Towns with high insolvency rates will often have problems elsewhere, too: Blackpool, for example, which has the 10th-highest rate of personal insolvency in England and Wales, is the most deprived area in England, according to the government, while it has the 13th worst record for long-term unemployment, and is 2nd for cardiovascular deaths for people under-75.”


What causes insolvency among men and women?

R3 published a report in June 2016 on the different causes of men’s and women’s insolvencies. The report can be found here and a summary is here.

In 2016, the government also published statistics on the 17 causes of bankruptcy in 2015 as categorised by the Insolvency Service and broken down by gender. The statistics showed that:

  • 34% of men’s bankruptcies in 2015 were caused by the bankrupt’s own company running into financial problems, compared to 13% of women’s bankruptcies (26% for all adults).
  • The most common single cause of men’s bankruptcies in 2015 was ‘living beyond means’ (approx. 995 bankruptcies), closely followed by ‘management failure’ at their own company (990), and the bankrupt’s loss of their job (920).
  • The most common single cause of women’s bankruptcies in 2015 was ‘living beyond means’ (1,110), ‘relationship breakdown’ (1,075), and the loss of or a significant reduction in household income (750).

Different types of insolvency

Bankruptcy: During a bankruptcy your assets are placed under the control of a trustee who will use them to raise money to repay creditors. You are bankrupt for a year (during which you are subject to some restrictions, such as not being able to be director of a company), although your assets may stay under the trustee’s control after that. A creditor may petition the court to have you made bankrupt if you owe them at least £5,000, or you can apply to be made bankrupt yourself (which costs £680 in up-front government and court fees for online applications). With some exceptions, your debts are ‘cancelled’ at the end of the process.

Individual Voluntary Arrangements: A statutory agreement between you and your creditors to repay a certain portion of your debts over a certain period of time. You retain control of your assets and the agreement is overseen by an independent supervisor. You usually have to have some surplus income left over after your living costs every month from which to make payments.

Debt Relief Orders: You may enter a DRO if you have under £1,000 of assets and under £20,000 of debts. Your assets are not used to repay creditors and your debts are ‘cancelled’ at the end of the process. Like bankruptcy, you subject to some restrictions for a 12 month period.

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.