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Research from Newcastle Building Society has revealed that more than one-third of those aged 55-plus are relying on the state pension to fund the costs of old age and have not considered the option of equity release.

Almost half said they would dip into their savings, 30 per cent would use a private pension, but only 9 per cent would consider releasing money from their home.

Bob Mottershead, retail sales executive for Newcastle Building Society, said: "It is worrying to see that so many people aged 55-plus are looking to their pensions to pay for essential adaptations to their home when they could be overlooking their biggest asset - money tied up in their home."

The survey also asked people of other generations whether they would consider using equity release to fund the improvements. On average, 9 per cent had considered this solution.

Mr Mottershead said: "It is interesting to gain an insight into what I could I think be a lack of awareness on equity release, among both the older and younger generations. The findings highlight the need to educate all ages on the benefits of taking out such a scheme.

"Educating the under 25s on equity release will also expand knowledge of the sector and equally benefit those with parents close to retirement age, as the decision to opt for equity release is one which should be discussed and considered by all family members."

Post Retirement, how do you think you pay for any changes to your home?

Source: Newcastle Building Society

He said: "The research could also show a reluctance to explore equity release, as many people don’t realise they could still own their home – which is one of the most attractive reasons many of our customers choose lifetime mortgages over other options".

Rob Pinsent, head of Anchor Staying Put - the network of home improvement agencies operated by Anchor Trust, which provides housing for older people, said: "Many older people are choosing to continue living in their own homes. There are strong reasons for this: their homes may be where they spent their married lives, raised their families and built friendships and social lives."

Richard Morea, technical manager of Bath-based adviser London & Country Mortgages, said: "Anyone who feels their pension income is not going to be enough to fund the costs of old age should carefully consider all options and get quality advice. They have got to consider what is right for their own circumstances, including the impact it could have on their wider family."