Retired homeowners released more than £3 billion of property wealth last year, as the equity release market grew at a record rate, according to Key Retirement.

The over-55s finance specialist said that UK homes effectively ‘paid out’ more than £8.2 million a day in 2017 to pensioners.

The average amount of cash unlocked from property wealth was £77,380.

Huge rise

The total value of property wealth released in 2017 grew 40% on the previous year to over £3 billion – the fastest rate of growth on record, taking lending to more than double its size in 2014.

More than 100 retired homeowners tapped into their property wealth to fund retirement every day last year, as plan sales increased by 41% to 38,955 from 27,666 in 2016.

How to spend it

The most popular use of the cash was to fund home and garden improvements with 64% re-investing some or all of their money in their houses.

One in three (33%) were taking more holidays while 24% used the cash to help family and friends.

However, many used the money to clear debts with a fifth (22%) paying off existing mortgages including interest-only capital repayments and 31% clearing credit cards and loans.

Dean Mirfin, chief product officer at Key Retirement, said: “Expansion in the market is being driven by customer demand as retired homeowners’ confidence in making full use of their property wealth continues to grow.

“More lenders are launching in the market in response to demand and that in turn is increasing competition, driving down rates and bringing new innovative features to the market as expert advisers increasingly recognise how property wealth makes a major difference for retirement income.”