Equity release an attractive option for silver splitters

New research has shown an interesting use for equity release. According to recent analysis*, nearly one in ten over-60s taking out equity release plans on the value of their home are divorced or separated. The news comes in light of figures released last month by the Office for National Statistics (ONS), which demonstrate that the number of people getting a divorce when over the age of 60 has risen significantly over the past ten years.

The number of so-called 'silver splitters' has increased from 1.6 divorces per 1,000 married men over the age of 60 in 1991 to 2.3 by 2011 (the latest year for which figures are available), according to the ONS.  Similarly, the number of divorces per 1,000 married women over 60 has risen from 1.2 to 1.6 over the same time period.

In contrast, overall divorce rates among other areas of the population have fallen.

A rapidly ageing population has some role to play in these findings, but divorce amongst the older generations is also thought to have increased because there are fewer stigmas attached and women have become more financially independent than used to be the case.

For divorced couples looking to make the most of their retirement, equity release appears to be an increasingly popular part of a financial settlement, with one in ten over-60s cashing in on the value of their home currently divorced or separated. The average amount released is also around 50% higher among those who are separated than married couples.

Divorce is a costly business, so it's not surprising that separated couples often have more financial need than those who are married. Equity release can also help to fund the purchase of new homes without either party having to sell their existing property.

Advisers should therefore be aware of the increasing potential equity release has as a financial solution among divorcees over the age of 60. However, it's vital that anyone seeking equity release is given expert advice so they can be sure that equity release is right for them.

*Research by Key Retirement Solutions

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