Brokers should see an opportunity arising from the rise in the number of people getting divorced later in life.
This is according to Marie Catch, head of mortgage sales at Legal & General Home Finance, who was speaking at the inaugural Financial Adviser Event in Manchester on Tuesday.
Catch said: “We’re seeing more customers coming to us for lifetime and retirement interest only mortgages as a result of divorce.”
ONS Statistics shared during the seminar show that between 1990 and 2018 the number of divorces amongst people over the age of 60 has increased by 63% for men and 65% for women. This has increased the median age of divorce from 36 to 46 for men and from 34 to 44 for women.
As more people look at how to separate, Catch said, it is important that all assets are taken into consideration. However, Legal & General found that while people often consider the value of their family home (50%), there’s a tendency for over-50s to overlook their pensions and retirement savings when agreeing a financial split.
During a divorce, just 12% consider pensions when dividing assets with their partners and 24% actively waive their rights to the value of them. Indeed, only 31% sign Clean Break Orders, meaning that more than two-thirds (69%) could be liable to a future claim from their ex-spouses. The research found that the perceived difficulty of disentangling shared incomes and property was a key reason behind the fact that 33% of people delayed their divorce for longer than they would have hoped.
Catch continued: “We found that people in the process of divorcing tend to focus on the family home, and overlook the mutual value of their pensions. Considering one, but not the other, can leave one or both parties at a significant financial disadvantage.”
The research found that 38% of over-50s consider their divorces financially unfair, yet just 3% of people sought financial advice when going through the process. Over-50s are four times as likely to seek advice from friends when going through a divorce as they are from a financial adviser; however, 20% said their divorce would make them more likely to consult financial advice in the future.
Catch concluded: “There’s an opportunity here for advisers to help this growing group of customers. This isn’t a selling conversation, it’s about adding real value and proving your worth.”
