Rising Numbers of Divorcees Use Equity Release in 2025
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- Equity release can provide divorcees with a lump sum or regular income, beneficial in managing finances and remaining in their home.
- Through this method, individuals post-divorce can tap into their home's value, offering a financial buffer after separation.
- As it enables access to home equity without the need to move, this option can be a suitable financial strategy for those recently divorced.
- For divorced individuals, converting part of their home's equity into cash, whether as a lump sum or regular payments, is a practical approach.
- It can assist in resolving financial matters post-divorce by offering a cash lump sum or ongoing payments from the property's equity.
Explore why a rising number of divorcees use equity release.
With the rising divorce rate among people over 501, equity release has become a popular means of borrowing.
Key Later Life Finances has released stats showing that more divorced women are opting for equity release as a later-life borrowing option to fund the circumstances that come with a divorce2.
In This Article, You Will Discover:
SovereignBoss has a dedicated equity release research team that combs the market continuously.
We aim to bring you the most current information on equity release as a whole, including plans, providers, news, and trends.
Discover all the facts about how equity release can work for you.
How’s Equity Affected During a Divorce?
Equity is affected similarly to other assets during a divorce.
Since equity is among the largest asset in most cases, it would need to be split according to your divorce agreement.
Generally, one party is removed from the title deed leaving the other party the sole owner.
This process is known as a transfer of equity.
What’s Equity Release?
Equity release allows you, as homeowners older than 55, to borrow money tied in your property without paying it back immediately.
You can have peace of mind about future expenses knowing that your equity release will be repaid once your property has been sold; this would either be once you die or move into long-term care.
Who Uses Equity Release More & What’s It Mostly Used For?
Studies by Key Later Life Finance show that 12% of those who release equity are divorced (2021)3. Of this, 72% are women.
| Divorced Equity Release Customers | % of total customers | % Males | % Females |
|---|---|---|---|
| 2019 | 10 | 26 | 74 |
| 2020 | 11 | 31 | 69 |
| 2021 | 12 | 28 | 72 |
| 2022 (Q1) | 12 | 31 | 69 |
Source: Key Later Life Finances4
More women chose to release equity for home renovations and gifting, while divorced men chose it to pay off debt.
It’s important to note!
Equity release isn’t for everyone, and you may need to consult with a financial advisor before making any commitments.
The downsides of equity release need to be discussed with your advisor so that you’re fully aware of what you’re committing to.
These downsides include devaluing the inheritance you plan to leave behind for your heirs, affecting your eligibility for means-tested benefits, and potential fees involved with early repayments and downsizing.
Regional Differences: Equity Release Patterns Among Divorcees Across the UK
Equity release patterns among divorcees vary significantly across the UK, influenced by regional housing markets and financial climates.
In London and the South East, high property values lead to more substantial equity release amounts, providing greater financial flexibility post-divorce.
This contrasts with northern regions, where lower property values result in smaller equity release sums, impacting the available funds for divorce settlements and new living arrangements.
Regional differences also affect the prevalence of equity release.
Divorcees in urban areas with higher property values are more likely to utilise equity release to manage financial demands, while those in rural or less affluent regions may rely on alternative solutions such as downsizing.
These disparities highlight the need for tailored financial strategies based on geographic location and property value when navigating post-divorce financial planning.
Equity Release vs. Downsizing: The Divorcee’s Dilemma
In the South East and London, where property values are high, divorcees often find equity release a more appealing option than downsizing.
The substantial equity in these regions can provide a significant financial boost without the need to leave familiar surroundings.
This flexibility is particularly valuable for those wanting to maintain their lifestyle or invest in a new property.
Conversely, in northern regions with lower property values, downsizing might be the more practical choice.
The proceeds from selling a home can be substantial enough to cover post-divorce expenses and still leave room for savings.
For these divorcees, the decision to downsize can offer a straightforward financial solution, while equity release might not yield enough funds to justify its use.
Common Questions
Can I Use Equity Release to Buy Out My Partner?
What Are the Benefits of Using Equity Release for Divorcees?
How Can Equity Release Help Financially After a Divorce?
Is Equity Release a Good Option for Divorcees?
How Does Equity Release Work for Divorced Individuals?
Can Equity Release Aid in Settlement of Divorce Finances?
Conclusion
With later-life divorces on the increase5, couples are looking for ways to fund a new property and split an estate without having to sell the family home.
Divorce is an emotional process, and the financial uncertainty it causes can add salt to an already raw wound.
With the potential to relieve some of the financial strain on both parties, it’s no surprise that a rising number of divorcees are turning to equity release for financial relief.