Key Later Life Finance said the number of female divorcees using equity release had gradually increased over the last few years and was expected to climb further following the introduction of no-fault divorces in April 2022.
The firm’s research found that during 2021, 12 per cent of people who released equity from their home were divorced, a one percentage point increase compared with 2020. Of the divorcees who took out equity release nearly three quarters, 72 per cent were female, up from 69 per cent in 2020, compared to just 28 per cent of men in 2021, down two percentage points on 2020, at 30 per cent.
No-fault divorces were introduced as part of the Divorce, Dissolution and Separation Act (2020). The ended the need for separating couples to apportion blame for the breakdown of their marriage, helping them to instead focus on key practical decisions involving children or their finances and look to the future.
Previously, one spouse was forced to make accusations about the other’s conduct, such as ‘unreasonable behaviour’ or adultery, or face years of separation before a divorce could be granted. This was regardless of whether a couple had made a mutual decision to separate.
|Divorced equity release customers|
|Per cent of total customers||Men||Women|
|2019||10 per cent||26 per cent||74 per cent|
|2020||11 per cent||31 per cent||69 per cent|
|2021||12 per cent||28 per cent||72 per cent|
|Q1 2022||12 per cent||31 per cent||69 per cent|
Source: Key Later Life Finance
Divorced women are more likely to use equity release for gifting at 16 per cent, and home improvements at 41 per cent than their male counterparts – at nine per cent and 31 per cent respectively.
Key found that a significant amount of divorced men, 70 per cent, use more of their housing equity for debt repayment than couples, which accounted for 42 per cent and divorced women, 56 per cent.
|Per cent of equity release||Per cent of those releasing equity|
|Gifting||11 per cent||15 per cent||Six per cent||Nine per cent||16 per cent||22 per cent|
|Home improvements||Four per cent||11 per cent||Nine per cent||31 per cent||41 per cent||36 per cent|
|Debt repayment||70 per cent||56 per cent||42 per cent||67 per cent||59 per cent||33 per cent|
Source: Key Later Life Finance
Will Hale (pictured), chief executive at Key Later Life Finance, said: “Over the last few years, we have seen an increase in divorcees using equity release with more women than men choosing to access their housing equity. With the most recent Office for National Statistics data highlighting that divorce amongst those aged over 65 has increased by 46 per cent year on year and no-fault divorces now a reality, the number of divorcees who consider this option is only likely to increase.
“Women in particular appear to be keen to access their housing equity – potentially as they received the family home rather than pension assets and other savings or investments as part of a divorce settlement. Digging into the details, more women are driven by the desire to gift and age proof their home while more men focus on debt repayment.
“Equity release is just one option some are turning towards, to help fund their later life following a change in circumstance such as divorce but there are a variety of other considerations. Speaking to a specialist financial adviser will help people to better understand what these options are and whether they may be right for their them.”