Nearly one in 10 over 60’s taking out equity release plans on the value of their home are divorced or separated, new figures from over 55’s specialist adviser Key Retirement Solutions shows.
And the average amount being released by couples who are separated is around 50 per cent higher than married couples, analysis of Key Retirement Solutions’ customer database shows.
Couples who are separating release an average of £63,300 compared with £41,100 for married couples reflecting the need for more money during a separation.
Government figures show the number of divorces among over 60’s is rising in contrast with a fall in the number of divorces in total. For over 60’s men in England and Wales the number of divorces has risen by 73 per cent in the past 10 years and it has grown by 81 per cent for over 60’s women.
Analysts say the rise in divorce is partially driven by increased financial independence among women who are now more able to support themselves following divorce. Other reasons for the rise in divorce include increased longevity.
Key Retirement Solutions believes equity release can help divorcing couples to split their assets with less financial damage and the need to buy new homes but urges any couples to seek independent financial advice. Its Pensioner Property Equity Index shows over 65’s homeowners in Great Britain have property equity worth around £774 billion.
Dean Mirfin, Group Director at Key Retirement Solutions (www.keyrs.co.uk), said: “The rise in divorce among over 60’s despite the overall drop in levels in divorce is a sad reality and is reflected in increasing use of equity release as part of the financial settlement.
“The over 60’s will in general have more valuable assets to split when marriages end and equity release can help in enabling couples to avoid having to sell their home and both buy again. Couples who are separated are releasing 50 per cent more than married couples as our figures show.
“Advisers need to be aware of equity release as a potential solution among a range of solutions for divorcing couples.”
Key Retirement’s figures show the equity release market is continuing to grow – total funds released across the market climbed 12.2 per cent to £508.413 million from £446.21 million in the first half of 2013 and once untapped drawdown funds of more than £143 million – which have yet to be released – are added in the total released was nearer £652 million.
Plan sales climbed 2.7 per cent during the six months to 9,540 from 9,288 with lump sum single advance lifetime mortgages making up around 37 per cent of all plans sold compared with 63 per cent from drawdown.
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