One in 10 (11%) couples who divorce after the age of 50 use money from their property (e.g. from the sale of a family home or equity release) to fund the cost of their divorce, according to new research from Legal & General .
The research, which explored the financial impact of divorce in later-life, also revealed that property wealth is the most important consideration for most couples at the point of divorce. For many over 50s, property wealth is their most significant financial asset, with people over 55 holding the majority of housing wealth in the UK, totalling more than £3.5 trillion in property assets alone.
Three fifths of all people who divorce over 50 (60%) will discuss the value of their joint home as they prepare to separate. Many over 50s will buy their partner out using savings (18%), with one in 20 couples turning to equity release to stay in their homes. Homeowners in England and Wales could release an average of £69,600 from their homes using equity release; an increase of 20% in just five years.
Despite the complexity of dividing finances, only 8% take financial advice about their separation. Lorna Shah, Managing Director, Legal & General Retail Retirement said:
“For many couples over 50, their home holds huge sentimental value, as well as being one of the most significant financial assets they jointly own. It’s therefore not surprising that property is the priority during discussions for over half of divorcing couples.
What is surprising is that only 8% take financial advice at such a complicated and emotionally charged point in their lives. This is particularly important for couples aged over 50 as the decisions made can have significant consequences on their retirement plans. It’s best to ensure they’ve explored all of the options available to them and chose those that best suit their individual circumstances.”
