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Those that took out 100 per cent loan-to-value plus mortgages are facing negative equity and an increasing number of sub-prime and prime borrowers are faced with the prospect of moving onto their lender's standard variable rate as there is no where else to turn.

Repossessions are rising because those that stretched themselves to get a mortgage two years ago are now faced with a payment shock and increased costs of living.

But when these situations come up in conversation it is unlikely that the image of someone in, or nearing retirement, springs to mind.

However, research conducted by equity release adviser Key Retirement Solutions has revealed a third of the UK population aged 55 or more still has mortgage debt.

The intermediary also found the average debt for those aged more than 70 is £45,943. So with lending criteria tightening and the earning potential of many in that age bracket reduced, what are the options for those still with mortgage debt?

Colin Taylor, managing director for Preston-based intermediary Key Retirement Solutions, said: "It is an affordability issue. If you get to a certain age and all you are living on is a pension then you could not even afford to replace a mortgage with a serviceable loan."

This is something Tim Loy, chief executive Leeds-based equity release adviser Age Partnership, agrees with.

He said: "Other avenues are being closed off. If you need a short-term loan it is maybe a bit more difficult to get now because criteria has tightened up.

"If you are coming to the end of a fixed rate deal, particularly in your 70s, it is probably a lot more difficult to get a mortgage so equity release is a solution for these people."

Although equity release presents an answer there is also the option of downsizing in a bid to free up capital and reconcile the mortgage debt. However this is increasingly becoming an unattractive option, particularly for those aged more than 70.

Mr Taylor said: "It is an upheaval. It is costly as well and also because of the falling housing market fewer people want to sell their property and move when it is worth less than it was a few months ago.

"So what we are seeing is fewer people taking the downsizing option and deciding to release the equity in their home to clear the mortgage."

Alison Beeston, compliance and communications manager for provider Bridgewater Equity Release, said remortgaging was not really an option for many of those whose only income was their pension.

She said: "In many cases, due to the tightening of criteria, these people will not have any option other than to downsize, which is problematic at the moment.

"The market conditions are reducing the choices these people have got, so equity release is becoming a product of choice."

Age Partnership's Mr Loy said: "We have seen use of equity release increase certainly in the last 12 months but given the economic climate we will see further increases in people releasing equity for that particular reason."

So how does equity release stack up against a standard remortgage? For a start equity release interest rates have a competitive edge on some standard mortgage products.

Key Retirement Solutions' Mr Taylor said: "For equity release the lowest rate in June was 5.99 per cent, which is not bad at all and the majority are fixed for life.

"Obviously further drawdowns are based on the interest rate at the time but if you had a lump sum to replace that mortgage you would take a lump sum at 5.99 or 6.1 per cent which is more competitive than a lot of two-year fixed rates out there."

The other advantage of taking out an equity release product compared with a residential deal is the lack of monthly payments, which would be required to service a standard loan or mortgage.

Key Retirement Solutions' Mr Taylor said: "The difference between having to pay £300 a month or not really makes a difference to someone in that position. With rising inflation, petrol, fuel and food prices plus pension inflation is far greater than normal inflation because a greater proportion of their money goes on food and heating and we will see that even more in the winter months."

Bridgewater Equity Release's Ms Beeston also pointed out there was a peace of mind associated with a lifetime mortgage or home reversion product and the application process was less of a stressful procedure.

She said: "There is no credit scoring on most equity release plans, but they have the absolute security of tenure so there is no risk of going into default and then being threatened with repossesion."

However not all of those in the equity release sector are convinced it is the silver bullet to reconcile a mortgage and there were many aspects to consider.

Anthony Rafferty, head of marketing of post retirement for Norwich Union, said: "The cost of living is going up and people have pockets of other types of debt but I am not not convinced if someone has £50,000 remaining on their mortgage they should clear it by using equity release. They are just taking another much longer term loan to pay it off."

Bridgewater Equity Release's Ms Beeston said even though equity release was an obvious option it was only one of several choices for consumers.

She said: "If they are 55 they could live for a long, long time so it is considering what they might need further monies for in the long term and are they left with options in the long term.

"It is almost an easier decision to make when the client is older. When they are younger, because there is a longer time they have got to live, I guess greater discussion needs to take place with the client."