Equity release plans allow older homeowners to free up a lump sum or take a regular income from their property.

Just Retirement carried out a survey of homeowners which found that found that most people did not know that equity release is regulated, that interest rates on equity release products are fixed or that loan repayments are guaranteed not to exceed the property value.

The research also revealed that those aged over-55 were unsure of what plans were available and what protection they had against losing their home at present.

For those set to retire in the next year 39% said their primary source of advice on equity release was a professional adviser, yet only one-in-ten could name an equity release provider without being prompted.

Stephen Lowe, group director of external affairs and customer insight at Just Retirement, commented:

“The run-up to retirement is a time when people look at their finances carefully and start planning how best to use or pass on their wealth.

“Increasingly, for baby boomers who have benefited from rising house prices, that involves looking at how best to use the wealth tied up in their homes.

“For many of today’s retirees, their property value will account for a significant – and for some with small pensions – the most significant proportion of their overall wealth. It is available to be used or passed on at some point so it needs to be factored into the retirement planning conversation, ideally from an early stage.”