The figures show in one year, sales fell by 30% from £224.76m in 2009 to £157.97m in 2010. This is a direct sales drop from 27% of market share to 19% in Q4 2010.

The equity release market contracted 8% after advances fell due to lack of funding and fear of rising interest rates, following a 15% market contraction in 2010.

Despite calls for the industry to unite to promote the sector’s retirement planning benefits, in 2010, the market fell 15% from £946m in 2009 to £804m in 2010.

Market share of the different product types were unchanged with drawdown dominating sales at 57%, lump sum products at 41% and reversion plans at 2%.

The average amounts of cash released saw a small drop of just under £500 to £45,218, signalling greater financial caution from consumers, said SHIP.

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Intermediaries sold 81% of all the equity release products, but direct sales also increased marginally by 1% from 18% in Q3 2010 to 19% in Q4 2010 as the market worked to recover from provider withdrawals earlier in the year.

Andrea Rozario, director General of SHIP, said: “The general feeling of unease amongst UK consumers as well as a reduction in product providers has driven a marginal quarter on quarter decrease and year on year fall.

“The last few years have seen unprecedented world economic turbulence, but we are confident that as the Government and the private sector work hard to foster stability, the equity release market will follow suit.”