The 2009 Equity Release Market Monitor from KRS showed that while the most popular use of equity release remained home improvement, debt repayment became the second most popular choice for homeowners last year.

Dean Mirfin, group director at KRS, said the increase in the use of funds to repay debt was one of the greatest trend changes in equity release that the firm had ever seen.

He added: “The equity release sector is not immune to the effects of the current economic climate. Debt repayment mirrors the trend across all ages of clearing debt and freeing up more disposable income and this will continue further still in 2010.”

Andrea Rozario, directorgeneral of Safe Home Income Plans (SHIP), said it was good that people realised that equity release was a safe way to tackle the problem of debt.

She added: “With the current economic climate and pensions being cut, retirees may need more money. If people use equity release to tackle debt consolidation, they know they will have a roof over their heads while they deal with debt.

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People still need advice to ensure that the option they choose is the best for their circumstances.”