In the 16-24 year-old age range, women’s median debt is Ł3,000, compared to men’s Ł5000. But women in this age group are almost twice as likely to be in arrears(4), with 13% in arrears compared to 7% of men in the same age group.

In the 25-29-year-old age range, women’s median debt is Ł3968, compared to men’s Ł6000. Women in this age group are also more likely to be in arrears, with 13% in arrears, compared to 11% of men in the same age group.

Causes of the problem

There is a wide-spread image that young women’s with debt are due to ‘frivolous’ spending, in particular on clothes. Although the pressure to maintain social status through consumer spending is likely to play a factor in young women’s debt, Fawcett believes the image of young women as being irresponsible with money has been overplayed, since our research found that similar numbers of young women and young men have credit or store cards(5), that young women are also slightly more likely to be saving than young men(6) and that women are more likely to be using forms of credit that are associated with poverty(7).

Other factors in the gap between young women’s and men’s to cope with debt are:

Young women have lower incomes than young men; the gap is small at first, but grows to 15% by age 25(8)
Young women’s debt is more likely to be associated with poverty than young men’s(9)

Solutions

The Government has made good progress on providing help to avoid or deal with problem debt in recent years. But there’s more it could do, for instance:

Pay gaps: Take stronger action to close the pay and income gaps between women and men
Preventing debt problems: Ensure the new financial capability lessons proposed for secondary schools, which Fawcett welcomes, address the different challenges girls and boys will face, including social pressure and the drops in income women are more likely to experience when having children or when a relationship breaks down.
Access to affordable credit: Ensure young women can access affordable credit and loans. There needs to be easily accessible money and debt advice for women after they leave education too.

Project Manager Jenny Westaway said:

“There’s an idea that young women struggling with debt are just irresponsible and unable to resist handbags. In fact our picture is of many women struggling to make ends meet on lower incomes than their male counterparts.”

Notes

About Fawcett

http://www.fawcettsociety.org.uk/documents/Women%20and%20debt(1).pdf

http://www.fawcettsociety.org.uk/index.asp?PageID=431

All figures for amounts owed come from the BHPS 2005 and are 5% trimmed mean averages to minimise distortions caused by those owing very high or low amounts

Behind on one or more bills, including rent, utilities, loans or credit agreements. All arrears figures quoted are from the FRS 2004-5

Among 16-24-year-olds 29% of women have a store or credit card, compared to 23% of men. In the 25-29-year-old age group 57% of women and 59% of men have either or both of these sorts of cards.

Among 16-24-year-olds 59% of women have savings, compared to 57% of men. In the 25-29-year-old age group 68% of women have savings, compared to 63% of men

Such as home credit or catalogue debts, which are easier to access for those who cannot pass credit tests due to low income or bad credit history, but have interests rates sometimes 20 times as high as mainstream lenders.

Women and Equality Unit, Individual Income 1996/97-2004/05, 2006

In the Citizens’ Advice 2003 report, In too deep, highlights that young women’s debts were more likely to be associated with poverty than young men’s

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