Passion for fashion causes women to rack up debts
As reports blame 'irresponsible spending' for a five-fold rise in the number of women going bankrupt in the past ten years, new research from uSwitch.com, the independent price comparison and switching service, reveals that the tough economic climate is not breaking the stride of the nation's fashion addicts. Four million women are in the grips of shopaholicism, plunging themselves into debts of over £13 billion and delaying repayments as they chase the latest ‘must-have' item.
Female shopaholics spend an average of £2,436 a year, 51% of their total disposable income, on clothes, accessories and grooming. While trips to the high street account for the majority (55%) of purchases, 45% of spending is now carried out from the comfort of their own living room. And while a third (33%) claim that they have reined in shopping trips given the current economic climate, 23% admit that their shopping behaviour hasn't changed at all - in fact, 4% are shopping more to ‘cheer themselves up'. When it comes to budgeting, any lessons learnt from the recession have been airbrushed out of the picture. Just 14% of female shopaholics budget for all of their month's spending in advance and 41% would buy an item they really wanted, even if they knew it would push them over their overdraft limit.
Buy now, pay later
Use of easily available unsecured credit to finance fashion purchases is contributing to a vicious circle of spending and debt. Half of female shoppers (50%) use a combination of credit cards, store cards, overdrafts or loans to fund their shopping sprees, but amongst female shopaholics this rises to a disturbing 74%.
Over three quarters of the debt accrued by the female shopaholic can be attributed to her bulging wardrobe. This equates to £3,353 of debt compared to the average shopper's debt of £1,147. When it comes to paying back purchases, women caught in the shopping trap are forced to direct 19% of their income towards debt repayments, compared to a national average of 8%. Worse still, shopaholics take over seven months to clear their debts, compared to the average female shopper who manages it in just over five months.
The most troubling aspect of the unquenchable thirst for shopping is the dishonesty around the purchases made. Over a quarter of shopaholics either lie about the cost of their shopping or simply hide it from their partner. And when it comes to paying for the goods, 17% admit to having sneaked items onto their partner's credit card.
Closing the gap
But, while women spend a larger proportion of their disposable income on shopping, a new wave of ‘metrosexual' men have embraced the internet shopping revolution. This has given rise to three million male shopaholics, saddled with personal shopping debts of £3,425 each. The uSwitch.com report reveals that, while women spend the most on high street clothes, men have more expensive tastes. In fact, they spend over £570 a year on designer clothing, nearly double the £300 dished out by female shopaholics. Men are also splashing out more on grooming, an area which has traditionally been dominated by the female shopper. The male shopaholic spends an average of £338 a year on skincare and cosmetics, whereas their female counterparts spend just £191.
Ann Robinson, Director of Consumer Policy, for uSwitch.com says: "In today's celebrity obsessed society, any lessons learnt from the recession have been airbrushed out of the picture. Despite the financial constraints, women have carried on copying the lifestyles and shopping habits of their idols and ignoring the debt they are racking up in the process. But this spend-emic has spread and it's clear that men too have caught on to the joys and perils of shopping.
"It's time for everyone to pay serious attention to their spending habits. Short-term debt solutions may seem an efficient way to fund spending, but they can also lead to long-term debt if not managed properly. Consumers need to stay in control of their finances - it's easy in the face of feeling impoverished to let go of the spending reins altogether. By recognising that risk and not falling victim to it, consumers can feel empowered and enjoy the pleasure-rush of a new purchase, without racking up more unsecured debt. It is all gain and no pain."