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Women struggle to manage debts

Christina Hoghton
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Christina Hoghton

An increasing number of women are caught in a cycle of debt, and borrow just to cover living expenses

Over two-thirds of women rely on credit to fund their lives, leaving many vulnerable to a cycle of debt, according to a new report by debt management business, Debt Advisory Centre.

The Women and Debt report revealed that debt levels are rising among women, as a result of lower incomes and family breakdowns. Worryingly, 69% borrow money not only to pay for lifestyle choices, but to cover essentials such as housing, heating and food.

The study found that 1 in 10 women has at least £10,000 of debt, and there has been a fivefold increase in the proportion of young females seeking help with problem debt.

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Credit cards are by far the most popular way for women to borrow money, with 53% of respondents saying they have at least one credit card. The biggest reason women use a credit card is to pay for housing, utility bills or food shopping, with a quarter of those asked relying on credit cards to cover everyday living costs.The challenge of trying to make their income stretch has meant around a third of women have fallen behind with payments on their unsecured credit and household bills.

The biggest areas of arrears are rent/mortgage, credit cards, council tax and utility bills. Almost a fifth of those in arrears are at least four months behind with their payments.

Physical and mental health woes

Almost 80% of women with debt say it has had a negative impact on their lives. Two-thirds said their physical and mental health has suffered because of debt stress. Women also report that debt worries have impacted their relationship with their family and friends or has stopped them from getting a job because of a poor credit history.

Melanie Taylor, spokesperson for Debt Advisory Centre, said: “For a growing number of women who are using credit to fund their lives, making debt repayments has become unmanageable. Typically having lower pay than men, being more likely to take time away from work to care for families, and unexpected life events such as relationship breakdowns or redundancy, is impacting women’s ability to successfully manage money.

“The stress caused by spiralling debt is affecting every aspect of women’s lives from their physical and mental health to their relationships with loved ones and even their employment. Our research found that around half of women with problem debt cut back on essentials such as food, clothing, heating, and travel costs, to enable them to meet their debt repayments.”