The Equity Release Council’s latest market report found the percentage of equity release customers aged between 55 and 64 rose to 20% of the market in the second half of 2014.

This is up on the 17% recorded in the first six months of the year.

The council said this was due to the Mortgage Market Review making it more difficult to obtain finance in the traditional manner. Following the introduction of new lending rules in April 2014 many lenders have shied away from lending into retirement.

It also suggested the announcement of changes to the pensions market in the 2014 Budget may also have increased interest in equity release.

However, the typical equity release customer continues to be in their late 60s or early 70s.

Nigel Waterson, chairman of the Equity Release Council said: “Equity release is helping people respond to a host of financial challenges at various points in later life, or simply enhance their standard of living so they can enjoy a more comfortable retirement. Part of the appeal lies in the option to cover off large one-off expenses.

“Paying off the last of an existing mortgage is often one of the biggest financial deadlines people have to face beyond the age of 55. The flexibility of equity release enables them to wipe the slate clean while also using their housing wealth to meet a range of other needs.

“The money they have put into property often proves a good investment over time. Releasing equity gives people a chance to use these funds in later life to enrich their lifestyle. Product choices are limited for older customers in the residential mortgage market, however new lenders are coming into the market to boost equity release activity – and bringing more choice and flexibilities for consumers.”