According to figures released by the Equity Release Council (ERC), the total value of the equity release market increased by 17% to £925.7m in 2012, up from £788.6m in 2011.

The average value of equity release plans last year was £52,191, the higher than in any year since 1998.

The ERC attributed this growth to the fact that more people are carrying mortgage and credit card debt into retirement and seeking to address outstanding balances on products including interest-only mortgages.

There was a 10% annual growth in the number of plans sold in 2012, mainly through independent financial advisers. Drawdown products accounted for 13% greater volume (12,500 plans) and 27% greater value (£610.0m) in 2012 compared with the previous year, when 11,000 plans saw £480.1m of equity released.

The total value of lump sum mortgages registered a more modest 5% growth in volume (from 4,800 to 5,000 plans) and 7% in value (from £291.0m to £310m) between 2011 and 2012. They currently make up 33% of the total market value compared with 49% in 2009.

Andrea Rozario, director general of the Equity Release Council said:

“These figures are a great conclusion to what has been a landmark year for the Equity Release Council, having relaunched with a new identity and extended the reach of our membership to include more representatives and interest groups from across the market.

“The ongoing debate over issues like later life finances and the cost of elderly care has already grabbed the attention in 2013. But the growth of the equity release market over the last twelve months is a really positive sign that people are making proactive moves to get the best use out of their housing equity.”

Nigel Waterson, chairman of the Equity Release Council said:

“These figures show that there is a growing demand for regulated equity release products from reputable providers who abide by standards set by the Equity Release Council.”