Lending in the equity release market increased 30 per cent to £1.38bn last year, from £1.06bn for 2013, according to new figures from Key Retirement.
The organisation said that this was in part due to an increase in average borrowing to £64,748 from £56,045 for 2013 and sales of plans rising to 21,350 from 20,331 year-on-year, an increase of 5 per cent.
Results from the survey were drawn from over 6,000 respondents.
Drawdown remains the most popular type of equity release, accounting for 66 per cent of all new plans, providing potential further borrowing of £482.3m in addition to the £1.38bn initial advances, giving a total market for the year of £1.86bn, compared to the total of £1.42bn for 2013.
The average age for those releasing equity rose from 69 to 71 year-on-year, and 60 per cent of those releasing equity are couples, whilst 67 per cent more single women release equity than single men.
The study also showed 63 per cent of customers - compared with 58 per cent in 2013 - used some or all of the money they released to fund home and garden improvements.
Credit card and loan debts, as well as mortgages, remained another common use for equity release cash, with 30 per cent of customers using cash to get out of the red, while 22 per cent paid off mortgages.
Customers average property value increased to £260,000 in 2014 from £238,000 in 2013. That helped drive a 15 per cent rise in the average amount of property wealth released by UK equity release customers to nearly £64,800.
Dean Mirfin, group director at Key Retirement, commented that attitudes are shifting as pensioners recognise their property investment, if used wisely, can change their lifestyle.
“The launch of pension flexibility will accelerate that process with all the evidence showing people are spending their money sensibly.
“Debt in retirement however, is a major issue with large numbers of customers using money to clear mortgages as well as credit card debt and loans. That highlights a real need for lenders - including equity release providers - to develop solutions to help.”
ruth.gillbe@ft.com
