Realise your retirement dream by unlocking equity in your property

In fact, research from over-55 finance specialists Key Retirement has revealed that the majority of retirees releasing equity from their home are doing so in order to make improvements and upgrades to their existing property.

Of the 27,666 new equity release plans taken out in the UK in 2016 – which represents a 17 per cent surge in plan popularity overall – 63 per cent of homeowners used the money to make changes to their home or garden.

Equity release is available to those aged between 55 and 95, who own a property worth at least £60,000.

Taking out a plan allows homeowners to free up a tax-free cash lump sum from the value tied up in their property, with the amount available varying depending on factors such as age and market value.

As well as using the money in their home, retirees also used the money to enjoy their later years, with many planning exotic holidays and helping family members with their own finances. Key Retirement figures showed that 29 per cent used their released cash to go abroad, while 24 per cent gifted the money to family or friends.

However, with the total amount of money released in 2016 reaching £2.15billion, this represents a significant investment in property across the country.

Dean Mirfin, technical director at Key Retirement, explained that the increasing popularity of equity release plans shows a shift in financial planning for many.

He said: “The equity release market has broken through the £2billion barrier for the first time and has more than doubled in value in just five years, highlighting how property wealth is making a huge contribution to retirement planning.

“The average amount being released by retired homeowners at nearly £78,000 underlines that property wealth can help with a number of issues for customers, ranging from improving their homes and going on holiday to helping family and clearing debt.”

He added: “Rate cuts across the market and the launch of new solutions demonstrates that the market is responding to the growing need for alternatives to traditional retirement income solutions, which are being squeezed by historically low interest rates.”