The number of retired people in the UK taking out equity release plans has continued to grow, according to latest research by Key Retirement Solutions (KRS).
Lending in the sector increased by 16% during 2012. A total of £961.4 million was lent by the end of last year, nearing levels last seen in 2009.
A growing number of people are viewing the equity release market as an alternative solution to poor performing pension and annuity rates, whilst heightened confidence and awareness of the sector is believed to be driving an up-turn.
One in five retirees released equity in their homes to fund existing debts during last year, with homeowners releasing an average of £52,268 compared with £49,000 in 2011.
Research by Investment Life & Pensions Moneyfacts recently revealed the average annual income of a standard annuity for a 65-year old male fell by 11.5% during last year, representing the biggest yearly fall since 1998.
Richard Eagling, editor of Investment Life & Pensions Moneyfacts, said: "The realization that equity release can be used to supplement retirement incomes that have been squeezed by falling annuity rates, disappointing pension fund returns and high inflation has clearly boosted demand."
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