Figures from Key Retirement showed 23% of people used equity release to pay off their current mortgage.

However the most popular reason for releasing equity was to fund home improvements with 61% using the product for this purpose.

Other popular reasons include paying down other debts and loans (31%), going on holiday (28%) and treating family and friends (16%).

In the first quarter of the year the number of new plans taken out was 5,110, up 2.5% compared to last year. The total amount released was worth £340m, up 3.1% on the first three months of 2014.

In the past year the average amount of money has grown from £61,232 at the start of last year to £66,735 in 2015.

The number of customers using equity release in London has increased by 40% in the last year. However the number of plans in the North West dropped 28% and in Northern Ireland it is down 24%.

Dean Mirfin, technical director at Key Retirement, said: “Debt in retirement is a growing issue with large numbers of customers using money to clear mortgages as well as credit card debts and loans.

“That highlights a real need for lenders – including equity release providers – to develop solutions to help.”