Debt is one of those things that few people like to talk about and, like any corrosive, destructive force, it gets worse the longer you ignore it.
Given that the majority of those in debt are women, payday lenders are targetting women more than ever and our wages remain lower on average than mens – it’s worrying that mainstream women’s magazines give this issue so few column inches – it’s time we put debt on the feminist agenda.
1. Over 5 million women are in severe debt
Around two thirds of the 9 million people in severe debt in the UK are women, according to the Government-backed body the Money Advice Service.
2. More women are being declared insolvent
Insolvency Service data and Data Advice Foundation analysis suggest that women accounted for just 30 per cent of personal insolvencies in 2000, but that this rose to almost half in 2011, and women could soon account for the majority of insolvencies in the UK.
3. Women’s debt is bigger than men’s debt
Women were found to be in £22,418 worth of debt, on average, which is markedly higher than the £14,228 level for men, in the Cooperative Bank’s Modern Families and Household’s report.
4. Women earn less than men
According to the Fawcett Society the mean gender pay gap for all work (excluding overtime) in the private sector is 24.2% and 17.6% in the public sector. With less income to draw on, it may be harder for many women to pay off problem debt.
5. Households reliant on a woman’s salary have more debt
Households reliant on a woman’s salary typically receive nearly a third less income and have significantly more debt and smaller savings than when a man is the main source of earnings, according to research by the insurer Aviva.
6. ‘Hidden debt’ may be bigger than you think
Recent research by Jo Salter at the think tank Demos highlighted that total arrears, combining rent and council tax, and overdue utility bills come to almost £5 billion and yet this ‘hidden debt’ isn’t included in official debt figures in the UK. This means the real extent of the debt women face in daily life may be bigger than some of the statistics out there suggest.
7. Debt is high on the harm index
Jo Salter’s recent research asked people to rank their debts in terms of the negative impact. This ‘Harm Index’ highlighted that debt isn’t just harmful because it is hard to repay, it also has an impact on mental wellbeing and other factors. The research found that the top five most harmful debts were illegal loans, payday loans, council tax arrears, rent arrears and utility bills. The fact that three of the most harmful debts are incurred trying to pay for the basics – somewhere to live, heating and electricity – show that the social and emotional impact of debt should not be underestimated.
8. Debt defines our future
Debt doesn’t just loom large in daily life, it also shapes how many people see their future. Debt was an issue raised by a large number of people in a survey conducted by Survation, when asked what they would like their lives to be like in 2020. Some people spoke about how they would like to have kids, or buy a house, or do up their home, but only once they have become debt free.
A 42-year-old unemployed woman from London said: “I want to be living in another flat/bedsit/room, without bed bugs, that would be clean. I would like to be in a better health condition, and that my debts are reduced.”
9. Payday lenders are targeting women
Some payday loans companies seem to be trying to appeal specifically to women. Commenting on the development, Carl Packman, the author of Loan Sharks: The Rise and Rise of Payday Lending, said:
“Today, with the changing face of debt, payday loans companies have taken to appealing specifically at women. Firms like Cash Lady – famously advertised by Kerry Katona – are able to exploit hard up women and ensure they stay in debt to boost profits. A toxic mix of a cost of living crisis and the fact women are paid worse than their male counterparts, has taken its toll. We need to respond by ensuring financial independence away from problem debt. Government needs to regulate payday firms properly, make progress on a living wage, align the wages of men and women toward greater equality, and boost alternative sources of finance like credit unions”.
More and more people, including campaigners like Sharkstoppers, are trying to challenge the payday loans industry, while others like the movement behind the Bank of Salford are trying to create alternative, community-focussed, sources of finance.
10. Women need to talk about debt
More than 1 in 10 women, surveyed by the Cooperative Bank’s Modern Families and Household’s report, said they hide their debts from their partner, compared with around 1 in 7 men. This could mean around half a million of the 5 million women in severe debt are desperately trying to hide their money worries.
Trying to sweep debt under the carpet never works, which is why it is time to start a conversation about what needs to be done to tackle the growing problem of women’s debt.
Fran O’Leary is a Founder Member of Feminist Times and Director of Strategy and Innovation at Lodestone, writing in a personal capacity. Follow her @FranOLeary
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