Equity Release Can Help Divorced Pensioners

SHIP, the equity release trade body, commented on figures extracted from the Office of National Statistics this week; these figures found that the over 60s are the fastest growing age group for divorce and SHIP suggest that equity release might be the short-term solution for divorcing pensioners.

Since 1981, the overall trend for divorce rates has reduced by 12%, but amongst the over 60s it has shot up by 49%. With the number of pensioner divorces growing, this will leave many pensioners financially worse off – especially during the recession – and for many a short-term solution could be releasing the equity from their home.

Commenting on the new figures, director general of SHIP, Andrea Rozario said:”Clearly, ‘pensioner divorce’ is a pressing issue as growing numbers of older people are deciding that they would prefer to spend their retirement alone.”

“In the current uncertain financial climate, older people should consult with their financial adviser before making any large financial decisions, in order that they consider all available options and ensure the best retirement for both parties.”

Releasing Equity From Your Property

The downturn in property prices and the slowed property market are making it more difficult for pensioners who are going through a divorce to sell their property, and those who do sell will get significantly less as their house value will have dropped.

Like many house owners looking to sell their property, divorced pensioners cannot afford the financial loss of selling their property during the recession, and will have to sit tight on their property until the market picks up again. Equity release is therefore a short-term solution for pensioner divorcees, allowing them to release equity from their home and allowing them to put off the sale of their home until the housing market picks up again.

The reduction in interest on savings and pensions has already reduced the amount of monthly income pensioners have, and the higher cost of running a household on one retirement income highlights the potential hardship divorced pensioners face.

An equity release plan could boost the income for one half of the couple to move out, whilst the other stays in their own home. This short-term arrangement retains their ownership of their house allowing them to sell when the house values increase, allowing the loan to be paid off at a later date.

Free Equity Release advice for pensioners

Find out more information on equity release and see how it may benefit you during your retirement years from the equity release advisors at Age Partnership.

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