When divorce drives the move, are your later‑life clients really mortgage‑ready – or one step from falling through the gaps?
The first working Monday of January has become a media staple: “Divorce Day”, when family lawyers brace for a spike in enquiries from couples calling time on their relationships. For brokers, though, the story runs far deeper than a single day of headlines – and increasingly, it is shaping a material slice of business across the year.
Legal & General’s recent “Divorce Delays” research underlines how financial pressures are reshaping separation decisions, particularly in later life. Around 280,000 divorces have been delayed in recent years, with the cost of running two households cited as a key factor. For those who do proceed, housing sits at the heart of the financial stress – and brokers are often on the frontline of some of the most difficult conversations.
Beyond ‘Divorce Day’: separation as a year‑round driver of demand
Daniel Bell, director at Bell Financial Solutions, told Mortgage Introducer that the “Divorce Day” label risks trivialising what has become a sustained, structural trend in advice.
“The idea of ‘Divorce Day’ may be rooted in January headlines, but for brokers the reality is far broader and more sustained,” he explained. “Relationship breakdown now feeds into mortgage enquiries throughout the year, and increasingly among clients in their late forties, fifties and early sixties. These are not first-time buyers or straightforward remortgages; they are people navigating separation alongside retirement planning, pension decisions and long-held assumptions about homeownership.”
This later‑life angle mirrors the Legal & General data picked up by OSB Group. Adrian Moloney, group intermediary director at OSB, notes that the timing and profile of divorce is changing – and so is its impact on the mortgage journey.
“The biggest pressure point for many separating couples is housing,” he said. “Research from Legal & General last year shows around 280,000 divorces have been delayed in recent years due to financial pressures, with the cost of setting up two households playing a part.”
Housing: the central pressure point
Both Moloney and Bell agree that housing is where expectations and affordability collide most sharply.
“For those who do separate, the family home is typically at the centre of the decision-making process,” Moloney said. “Legal & General data also shows that around one in ten couples over 50 use property wealth – through a sale or equity release – to fund the cost of divorce. However, the long-term impact is severe: almost a quarter of those surveyed this year (24%) struggle to rebuild savings after a late-life split, with 180,000 divorcees (13%) saying they will never financially recover.”
Bell sees that tension play out in day‑to‑day casework.
“Housing remains the central pressure point,” he reported. “Many separating couples initially expect one partner to remain in the family home, but affordability frequently undermines that plan. Moving from two incomes to one, often at higher interest rates than when the mortgage was first arranged, can make buy-outs difficult even for borrowers with strong credit histories. As a result, we are seeing more forced compromises: downsizing earlier than planned, restructuring borrowing well into later life, or in some cases returning to the rental market after decades of ownership.”
For brokers, that means more complex structuring – and in some cases, delivering the news that a cherished outcome simply isn’t achievable within current lending criteria.
The income shock – and the homeownership reality check
If the emotional shock of separation is immediate, the financial shock can be more insidious.
“On paper, individual incomes may appear sufficient, but once maintenance payments, legal costs and existing commitments are factored in, borrowing capacity can fall away quickly,” Bell noted. “For some, separation marks the first time they confront the possibility that homeownership may not be immediately achievable on a single income.”
Moloney pointed out that this drop in capacity is not just about the headline salary.
“At the same time, income often falls sharply after separation,” he said. “Nearly a third (31%) of people who divorce after 50 give up rights to their partner’s pension, but only 8% consult a financial adviser first. This can significantly reduce borrowing power and limit housing options for at least one party. That makes access to flexible lending and good broker advice critical.”
For intermediaries, the affordability conversation is no longer a simple stress test exercise. It increasingly requires a holistic view of income, outgoings, support arrangements and future financial resilience.
Pensions: the forgotten asset with major mortgage implications
Both commentators highlight pensions as a critical yet frequently underappreciated part of the divorce–mortgage equation.
“Pensions are frequently the forgotten piece of the puzzle, despite often being the second-largest asset after the family home,” Bell said. “Clients understandably focus on bricks and mortar, but pension pots can dwarf property equity and have a profound impact on both long-term security and mortgage affordability. Too often, pension decisions are treated as a trade-off to ‘make the numbers work’ on housing, without a clear understanding of what is being given up.”
He argues that proper pension treatment requires more than back‑of‑an‑envelope compromises.
“In practice, fair pension outcomes in divorce require specialist input,” he continued. “Experienced pension-on-divorce actuaries are usually needed to calculate appropriate sharing arrangements, particularly where defined benefit schemes or significant age gaps are involved. Without that expertise, settlements can look balanced on the surface while storing up serious problems for later life borrowing and retirement planning.”
From the lender perspective, these pension choices go directly to long‑term affordability, especially where later‑life products, interest‑only or retirement interest‑only options are being considered.
Joined‑up advice and mortgage capacity reports
As divorce cases become more financially intricate, Bell said the need for collaboration between brokers, financial planners and legal professionals has never been greater.
“This is where joined-up advice becomes critical,” he stated. “Mortgage capacity reports, often used in mediation and court proceedings, can help separating clients and their advisers understand what housing outcomes are realistically achievable once pensions, income and future affordability are properly modelled. Not all brokers are equipped to produce this level of analysis, but where it is available, it can prevent unrealistic expectations and reduce the risk of settlements that unravel later.”
For intermediaries, this hints at a potential differentiator: those who can feed robust affordability modelling into the legal process may be better placed to secure sustainable outcomes for both parties – and to protect themselves from future complaints when optimistic assumptions fail to materialise.
Where lender flexibility makes – or breaks – the outcome
If separation is now a core advice theme, lenders’ approaches can be the difference between a client staying in secure housing or slipping back into an unstable rental position.
“Where outcomes are positive, lender flexibility usually plays a decisive role,” Bell said. “Later-life lending, sensible treatment of maintenance income, realistic loan terms and pragmatic affordability assessments can help keep separating clients in secure housing. Where the system still falls short is rigidity, criteria that fail to reflect modern family breakdowns and the financial realities of later-life separation.”
Moloney echoes the need for criteria that mirror real‑world complexity rather than idealised borrowers.
“As affordability slowly improves and rates stabilise, lenders and brokers have an important role to play in helping people navigate separation without losing access to secure housing, by offering solutions that reflect real-world complexity, not just headline rates,” he said.
For brokers, that might mean leaning into specialist and later‑life lenders, or working with providers open to nuanced assessments of maintenance income, shared care arrangements and variable earnings – all now common features of post‑divorce finances.
From intermediaries to interpreters of life events
If there is a single message for the intermediary community, it is that separation is no longer a niche factor cropping up in the occasional case file.
“Separation is no longer a marginal issue for mortgage advisers,” Bell concluded. “It has become a core part of the advice landscape, requiring brokers to act not just as intermediaries but as translators of complex financial trade-offs. The challenge is no longer simply securing a mortgage, but helping clients make housing decisions that remain sustainable long after the emotional and legal aspects of divorce have passed.”
For brokers, “Divorce Day” might bring a short‑term spike in enquiries – but the real opportunity, and responsibility, lies in building the skills, partnerships and lender relationships to support separating clients all year round, and well into later life.
