Press Releases
08 June 2009
Research proves that the over 45s are struggling the most with their finances
• Number of people over 45 years old going bankrupt jumps 124% in last five years
• Multiple marriages pile up financial responsibilities
People over 45 are struggling far more with their finances than other age groups, reveals research from Wilkins Kennedy, the Top 25 accountancy firm.
The number of individuals in the UK aged over 45 going bankrupt has jumped 124% over the last five years from 10,600 per year in 2004 to 23,800 in 2008, a rate that is far faster than the average for the population as a whole.
The number of personal bankrupts across all age groups has only increased by 89% over the same period from 35,700 per year in 2004 to 67,500 in 2008.
The proportion of all bankrupts who are aged over 45 is now 38% of all bankrupts compared to just 32% in 2004.
Anthony Cork, Director, of Wilkins Kennedy comments: “While the number of personal insolvencies has been climbing relentlessly, the finances of those aged over 45 is deteriorating far faster.”
Multiple marriages pile up financial responsibilities
Wilkins Kennedy says that the increase in multiple marriages and divorces is creating the high levels of financial obligations that can eventually end in bankruptcy.
Research by the Office for National Statistics shows that one in five people divorcing in 2007 had a previous marriage ending in divorce, compared to just one in ten in 1980.
Anthony Cork explains: “By the time people hit 45, many will have established a second or even a third family with additional numbers of children and ex-wives or ex-husbands to support financially.”
“This could mean people are having to help pay off part of the mortgage for their ex-husband’s or ex-wives’ home, contributing to expensive child care and maintenance costs whilst paying for a second set of school fees and mortgage payments from a new marriage.”
“As the recession drags on, more and more breadwinners could lose their jobs. With such financial burden on their shoulders, they could hit the insolvency wall incredibly quickly.”
“Traditionally the over 45s would have been the most affluent age group with the most spare spending power but for an increasing minority this is not the case.”
Houses no longer offer surplus equity to rely on
Anthony Cork adds: “The property boom saw a lot of people remortgaging their houses to cash in on the rising value of property but with the crash, many people now haven’t got much equity, if any, to rely on if they are made redundant or if their incomes fall.”
“The problem may get worse if property prices continue to fall and unemployment continues to rise.”
“Those over 45 are also more likely to start up their own business, remortgaging their houses to help fund the project. With SMEs being among the first casualties of the credit crunch, this may have led to a number of subsequent personal bankruptcies.”
Recession forces companies to trim expensive senior staff
Anthony Cork says that the recession has hit senior staff hard as companies look for rapid ways of cutting costs.
Says Anthony Cork: “Middle-aged executives earning the highest pay within organisations can often find they are the first to be culled especially as Age Discrimination legislation makes it potentially tricky to follow the old fashioned route of “last in first out”.”
Research based on information provided by the Insolvency Service.
ENDS
Press enquiries:
Anthony Cork
Director
Wilkins Kennedy
Tel: 020 7403 1877
Mobile: 07880 601 962
Keith Stevens
Partner
Wilkins Kennedy
Tel: 01784 435 561
Mobile: 07880 601 961
Jane Lougher or Nick Mattison
Mattison Public Relations
Tel: 020 7645 3636
