This is according to analysis carried out by leading over-55s financial provider Key Retirement. The report also shows that the total housing wealth paid out through equity release increased by 32% in a year.
The report builds on the data issued recently by the Equity Release Council and looks at many of the underlying trends in the market. Its Equity Release Market Monitor for Q3 2014 showed the UK’s house price boom is making an increasing contribution to improving standards of living in retirement.
While most of the money is being spent on leisurely pursuits such as gardening and travel, the report also highlighted that equity release is playing an increasingly important role in paying off debts.
Of those surveyed, 33% of customers used the money to pay off credit cards or personal loans compared with 30% for the same period in 2013. A further 28% used equity release to pay off mortgages, up from 23% last year.
The average customer released £67,500 compared with £57,286 in the three months to 30 September last year. On average, those releasing cash owned a house worth £264,600 compared with £248,200 last year.
Group director at Key Retirement Dean Mirfin said: “The strength of the housing market is giving retired homeowners increased confidence in using the wealth they have built up in their home to fund their retirement.
“For millions of retired homeowners their biggest and most successful investment is their home and it makes sense to release money now to improve their standard of living.
“The evidence shows the money is being used sensibly and invested in home improvements, clearing outstanding debts and helping families.”
More than a quarter of the total value released was in the South East where nearly £102m in housing wealth was paid out. Growth in Northern Ireland was particularly strong where total value released increased by more than 160% and plan sales increased by 86%.