Britain’s bankrupt P.Y.T.s

Britain's bankrupts are younger and more likely to be female according to a new report that suggests many individuals mistakenly believe bankruptcy is now a softer option.

It is also clear that the surge in bankruptcy is not a business or self-employed dominated phenomenon. Between 1996 and 2004, employed and unemployed bankrupts increased by nearly 300%, but in the same period, bankrupts who were self-employed halved.

In a sign that bankruptcy is increasingly becoming a young person’s phenomenon, almost 15% of all declared bankrupts in the year to 31 March 2004 were 30 or younger; nearly double the proportion two years earlier.

The figures also revealed a significant increase in the proportion of women entering bankruptcy over the last three years. Although men accounted for 63% of all bankruptcies in 2003/2004, the gap between male and female bankrupts is narrowing. According to PricewaterhouseCoopers there is a clear trend towards women becoming bankrupt and 45% more women went bankrupt in 2003/2004 than in 2001/2002.

The South-West had the highest proportion of female bankrupts (39.6%) in 2003/2004 compared to 34.5% in the North-West.

London and the North-West have the greatest concentration of male bankrupts (65%) in 2003/2004.

The North West and the South East have seen the greatest swing towards younger bankrupts as the proportion of under-30s going bankrupt increased 108.42% and 117.69% respectively.

A greater proportion of under-30s were declared bankrupt in the South-West (17.61 %) in 2003/2004 than in any other region

Patrick Boyden, partner in the Business Recovery Services practice at PricewaterhouseCoopers said: "A ‘new bankrupt’ is emerging who is more likely to female, under 30 and has not been in business before."

"Consumer debt levels among young people and women appear to have contributed to the explosion of bankruptcies last year and many individuals mistakenly believe bankruptcy is now a softer option."

The figures show that bankrupts are much less likely to be self-employed and in business. The proportion of bankrupts who were self-employed has fallen from 58% in 1996 to under 27% in 2004. In contrast the number of employees and unemployed bankrupts increased by 288% over the same period.

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