Equity release lending reached £384.3m between April and June making it the largest amount on record lent by the industry to homeowners over the age of 55, according to the Equity Release Council.

It said there were 11% more equity release customers during the period, taking the total number of borrowers to more than 5,400.

The uplift comes despite savers gaining greater access to their pension pots under the freedoms launched on 6 April.

Experts said the growth in people releasing equity from their property is a sign that people are “overhauling their approach to funding retirement”, with property wealth set to become an integral part of retirement planning.

Alex Edmans, head of retirement at Saga, said: “The Mortgage Market Review has stopped many older people from accessing a traditional mortgage, this and the fact that many people are now coming to the end of their interest only mortgage term without a full repayment plan, has meant that more are turning to equity release as a viable solution to borrowing in retirement. Indeed Saga has seen an increase in the use of equity release to clear a mortgage.

“Now is a good time to consider equity release, as interest rates are at their lowest ever levels, property prices are increasing and loan to values have recently increased, meaning people are able to access more of the wealth tied up in their property.”

Helen Davies, head of implementation at insurer Partnership, said: “Rising house prices combined with lack of pension provision and older consumers finding it increasingly tougher to borrow have created a perfect storm which is likely to continue to stimulate growth well into the future.

“While equity release should never replace adequate pension provision, considering how you can use your housing wealth in retirement should be part of people’s later life planning.   Whether it is used to repay a mortgage, to fund care or simply improve someone’s standard of living, it can make a big difference to peoples quality of life.”

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