The Equity Release Market Report said the typical pensioner couple outside of London released £40,467 from their home, a figure equivalent to 18 months of income.
In London, where higher house prices mean greater sums are withdrawn using equity release, it was equivalent to 4.2 years of net income.
Joint loans made up 64% of new equity plans agreed in the first half of 2014, the report found, up from 60% in 2013. In addition 23% were taken out by single females and 13% by single males.
The typical customer during the first half of the year was 70.8 years old. With a typical female living to 86 this means an average equity release customer will hold their loan for around 16 years.
Nigel Waterson, chairman of the Equity Release Council, said: “Saving enough to enjoy a good quality of life has become increasingly hard as living costs have taken their toll on our ageing population. But many are finding that the option to unlock housing wealth can provide the financial boost to enjoy a comfortable retirement, while still leaving significant sums for other uses – such as leaving an inheritance or passing wealth on to family members at an earlier stage of life.
“Opting for equity release is a decision to consider carefully, with three levels of protection – professional financial advice, legal guidance and product safeguards – to ensure that it suits individual needs. These findings show that for a growing number of people, the numbers add up to a better quality of retirement and provide an answer to many financial challenges.
Waterson added that the impact of the Mortgage Market Review would lead to more innovation in the coming years.
“Mainstream lenders have been compelled to tighten the options for older borrowers as a consequence of the Mortgage Market Review (MMR). Equity release can help bridge the funding gap, and the months ahead will see continuing discussions and innovations aimed at bringing it to a wider audience.”
Helen Davies, head of equity release implementation at Partnership, said: “With the typical UK house price standing at £232,000 – 8 times the average pension pot used to purchase an annuity – making use of this valuable asset in retirement to improve a person’s financial security or standard of living would seem prudent.
“Over the last ten years, we have seen a significant amount of innovation in the equity release arena – not least the launch of the first enhanced lifetime mortgage – and we look forward to more people taking advantage of the benefits these products can provide.”
