Equity release market grows by 26pc

Over the same period 5% more sales plans were taken out, increasing the total to 10,013 from 9,540 in the first six months of 2013.

The equity release market’s growth is underlined by the average loan size, which has increased by £10,000 to around £65,000.

The total amount released rose in 11 out of 12 regions, yet Northern Ireland performed particularly strongly, as plan sales and total value released increased by nearly one-and-half times.

London recorded growth in total value released of nearly 60%, while the South West and South East rose by over 30%.

Dean Mirfin, group director at Key, said: “Equity release is making a major contribution to retirement planning for thousands of homeowners and that is underlined by the growth in the average loan size of nearly £10,000.

“The massive changes on the way people fund and save for retirement highlight the increasing role that property wealth will play and the equity release market is ideally suited to the new retirement flexibility.”

The money released is increasingly being used to improve standards of living, as two thirds (66%) of customers used some or all of the cash to fund home or garden improvements compared with 55% last year, while a further 35% meanwhile spent it on holidays.

One in five (20%) used some or all of the money to pay off mortgages, while 30% cleared credit cards or loans with the money.

Standard drawdown plans accounted for 59% of sales while lifetime mortgages accounted for 31%.