Key Retirement has stated that pensioners withdrew £4.7 million a day from their homes last year.

The equity release market hit an all-time high after 24% growth saw total property wealth of £1.71 billion released with average homeowners benefiting to the tune of £72,000 each. In London pensioner homeowners released around £128,000 on average.

Sales of equity release plans climbed to 23,747 in 2015, 11% above the previous year as the launch of pension freedoms underlined the growth in retirement income choices.

Key’s 2015 Equity Release Market Monitor shows that the total value of property wealth released rose 24% from £1.38 billion in 2014 to a new record £1.71 billion for 2015.

Rising house prices helped drive confidence in using property wealth to increase retirement income – the average property value of homeowners using equity release plans rose around 6% to £274,770 from £259,882.

However, the average amount released increased by 11% from £64,750 in 2014 to around £72,000 last year. In London average customers released £128,000 and in the South East they benefited by releasing over £84,000 of property wealth.

The majority of the money helped to improve retirement lifestyles – 61% used some or all of the cash to fund home and garden improvements and 30% used some of the cash for holidays.

Credit card and loan debts as well as outstanding mortgages remain a major issue – 31% of customers used cash to get out of the red while 24% paid off mortgages, Key’s study shows. Mortgage repayment has consistently increased year on year over the past five years as the number of interest-only mortgage maturities increases. This trend is expected to continue as the first larger wave of maturities begins.

Dean Mirfin, technical director at Key Retirement, said:  “Property wealth is making a massive contribution to retirement income and planning with pensioners releasing a record £4.7 million a day from their homes.

“The average equity release customer is benefiting to the tune of over £72,000 from the wealth built up in their homes easily outstripping the average amounts being released from pension funds.

“Sales of equity release plans are rising strongly as well underlining how pension freedoms have widened the choice of retirement income solutions with people now considering their home as part of their retirement portfolio.

“Debt in retirement remains a major issue with large numbers of customers using money to clear mortgages as well as credit card debt and loans. That highlights a real need for lenders – including equity release providers – to develop solutions to help. The interest only mortgage problem steps up a considerable gear in 2016 and the market needs further innovation to meet this increased demand from those who urgently need solutions to enable them to remain in their homes.”

The value of property wealth released rose in 11 out of 12 regions and the number of plans sold rose in nine out of 12 regions. The greatest increase for both amount released and plan numbers was recorded in the South East (+42% amount, +26% plans) closely followed by Scotland (+40% amount, +21% plans). Northern Ireland recorded a 6% decrease in amount released but a 22% decrease in plan numbers.