One third of equity release customers are unlocking wealth from their properties to clear debts, as well as using the funds to make home improvements or gifting to family, according to Retirement Advantage.

Among the firm’s own customers, 35% used equity release in the third quarter of 2016 to clear an existing mortgage, and/or to consolidate unsecured debts. The findings follow research earlier this year which found that a quarter of those planning to retire this year expect to do so in debt.

Alice Watson, head of marketing at Retirement Advantage Equity Release, said: “Carrying residual mortgage debt into retirement is on the rise. House prices are at historic highs, household debt is growing again and interest only mortgages are maturing. This is reflected in the reasons our customers give for tapping into their property wealth.

“What’s encouraging though is that our customers are taking a holistic view of all their assets, and using property alongside pensions and other savings. What’s more, we know that our customers use equity release for multiple reasons. Clearing mortgages or other debts are popular ones, but so are going on holiday, covering daily living expenses and making home improvements.”

Retirement Advantage’s data shows that in Q3, home and garden improvements was another popular reason for using equity release – cited by 25% of their customers. Among other reasons given, 5% also used equity release to by a new property.

Watson added: “Current demographic trends suggest the retirement debt pattern will continue. People are buying their first property later than previous generations. At the same time, a new generation of house buyers are carrying student loan debts their parents did not.

“The good news is that with careful planning and financial advice, the options available can be assessed at an early stage. This will give people the tools to proactively manage debts while also enjoying the retirement they want.”