The Intermediary – February 2025 - Flipbook - Page 62
L AT E R L I F E L E N D I N G
Opinion
Divorcing clients:
Beyond bricks
and mortar
of housing wealth in the UK, with
property assets totalling more than
£3.5tn, according to the Office for
National Statistics (ONS). Aside from
the property’s value, for many, staying
in their family home is a priority.
Perhaps that is why our research also
revealed that 18% of over-50s will buy
their partner out using savings, with
one in 20 couples looking to equity
release in order to do so.
Financial advice
C
onversations around
divorce oen centre on
the emotional impact
of separation, which
is understandable.
However, the financial
repercussions are oen overlooked,
and they can have a significant impact
as people move forward.
Going from two incomes to one,
spliing assets, and deciding what
to do with a home that was probably
jointly owned, are all decisions
separating couples will have to make
– and they oen do so with a distinct
lack of appropriate advice.
Property wealth
The impact is oen most acutely felt
by people who are later in life, where
property wealth will be an important
consideration. Our research has
revealed that 60% of all people who
divorce over 50 will discuss the value
of their joint home as they prepare to
separate, underlining its importance
from both a sentimental and financial
perspective.
This is not surprising, given that
people over 55 hold the majority
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The Intermediary | February 2025
Despite the financial complexities
that divorcing couples face – and
particularly those separating over
50 – only 8% take financial advice
about their separation, leaving many
to navigate this major change in
the dark. This figure becomes more
alarming when we consider that
over-50s will oen be at a crossroads,
and the decisions they make could
have a greater impact on their
retirement income.
Financial advice increases the
likelihood clients can achieve fair and
sustainable financial selements,
particularly when clients seek this
advice early in the process.
For clients looking to stay in their
homes post-divorce, equity release
can be an aractive option, as it allows
homeowners to access the equity tied
up in their property without the need
to sell it. The funds from this can be
used for a variety of purposes, such
as covering the cost of the divorce
itself – which many underestimate
– or enabling one partner to buy out
the other.
However, it’s essential that clients
fully understand the implications
of equity release, such as its impact
on inheritance, the potential for
reduced means-tested benefits, and
the long-term financial commitments
involved. For some, downsizing may
LORNA SHAH
is managing director at
Legal & General Retail
Retirement
be a beer option, or using other
savings and investments.
Ultimately, when advising clients
about their property wealth options
at the point of divorce, it is essential
to explore every avenue available and
give good guidance to separate the
emotional pull of an asset, such as a
long-standing family home, from the
financial realities they face. A holistic
view of all income options for their
retirement is really important.
Path forward
Key to engaging with clients at such an
emotionally charged juncture in their
life is reminding them that options do
exist, and a path forward is possible.
For those divorcing, the financial
and emotional challenges can seem
hopelessly intertwined. However,
accessing advice and guidance at the
earliest possible stage sets them up best
to face the decisions ahead of them. ●
