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Property wealth eases the pain for silver splitters

19 April 2017

  • Around one in 10 equity release customers are divorced or separated, www.keyadvice.co.uk analysis shows
  • Separated couples release up to 13% more in property wealth

Property wealth is being increasingly used to ease the financial struggles of divorce and separation, enabling silver splitters to stay in their homes and fund new properties, analysis from leading over-55s financial specialist www.keyadvice.co.uk shows.
 
It’s data shows nearly one in 10 customers are now divorced or separated, with couples going through break-ups releasing up to 13% more than the average amount released by couples.
 
Key’s analysis of 2016 figures shows 10% of customers were divorced or separated, with couples who are separating releasing nearly £70,000 in contrast to the £61,700 for married couples.
 
The growing use of equity release for divorce and separation is part of a wider shift – around 17% of customers are widowed and married couples make up 65% of the total market. Single women account for nearly a quarter of sales compared with just 11% who are single men. 
 
The latest Government data** shows the only group to record an increase in the divorce rate is women aged 55-plus. Whilst across the UK the number of divorces and the divorce rate has dropped nearly 30% since the peak in 2004 to around 111,169 divorces a year, around 27% of divorces – or 30,560 - in 2014 were among couples aged 55-plus.
 
Analysts say the rise in divorce among women over-55 is partially driven by increased financial independence enabling them to support themselves following divorce while increased longevity is also a factor.
 
 
Dean Mirfin, technical director at Key (www.keyadvice.com), said: “Equity release enables one partner to remain in the home while allowing property wealth to be shared and is a growing alternative for settling property issues at divorce.
 
“It increases the funds available for the other partner to fund a new home and improves their chances of being accepted for a mortgage at a time when finances are stretched. It also enables a home purchase through the ability to release money on the new home as well if needed.
 
“The rise in divorce among women over-55, despite the overall drop among other age groups, is a sad reality and is reflected in the equity release market. Couples in that age group will in general have more valuable assets to split and more complex finances so there is a need for straightforward and fair solutions which equity release can contribute to.”
 
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting www.keyadvice.co.uk/equity-release/request-a-free-guide