And the UK Equity Release Market Monitor revealed on average the amount released by customers rose 7% to £52,268.
Dean Mirfin, group director at Key Retirement Solutions, said: “The increase in the average amount being released is significant as it demonstrates increasing confidence in the market as a solution to the continuing squeeze on pensioner income from low savings rates and falling annuity rates.”
In real terms the market is much larger due to funds of £415.6 million sitting in pre-agreed drawdown facilities which when they are accessed will take the amount released nearer to £1.4bn.
Plan sales climbed 6.3% during the year to 19,675 from 18,510 with drawdown plans enabling customers to benefit from lower borrowing costs as they can take funds when required rather than in a lump sum.
Around 74% of all equity release sales were drawdown products which Mirfin said confirmed the focus on innovation across the market.
This compared with 25% of take-up for lifetime mortgages and 1% from reversion plans.
The Market Monitor shows 18% of customers are using some or all of the cash released to pay off mortgages while 22% are using the money to clear credit card debts or loans.
Mirfin added: “Innovation in the market is continuing with the launch of plans designed to help clients tackle the issue of funding interest-only mortgages into retirement. Plans are now available enabling clients to pay interest and release funds which is a direct response to the interest-only ticking time bomb problem.”
Home and garden improvements remained the most popular use of funds with 57% of people using some or all of their cash for those purposes.
