Home reversion provider, Bridgewater Equity Release found that 43% of people used equity release schemes to pay off their mortgage in 2010, compared to 30% in 2009.

Home improvements and consolidating other debt rounded out the top three reasons behind using equity release, with their popularity markedly increasing over the last year.

Over 30% of respondents cited home improvements as one of the reasons for releasing equity, up from 17% in 2009. Consolidating other debt was highlighted by 27%, up from 15%.

In addition, travelling was revealed as a key reason for 19% of customers, followed by buying or repairing a car for 12%.

Other uses included combining home improvements and debt consolidation (7%); providing a gift, such as funding a house deposit or wedding (7%); and improving or maintaining a lifestyle (4%).

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However, just 1% said they would use the money to fund long-term care.

Peter Welch, head of sales and distribution at Bridgewater Equity Release, said: “Many more individuals in or reaching retirement find themselves with far higher levels of indebtedness than they imagined.

“With the credit crunch and recession biting hard in recent times, the older population has found it increasingly difficult to find remortgage or debt finance, because of the stricter criteria placed on lending into retirement.

“With this the case, individuals are now using the equity they have stored in their properties to become debt-free which not only enables them to plan more freely for the rest of the retirement but provides security of tenure in their home for the rest of their lives.”

He added that with the government cuts set to impact many areas of the company, he anticipates that more customers will use equity release to either maintain or improve their lifestyle or to look after their long-term care needs, which may not be funded by the state.”