Specialist intermediary Key Retirement Solutions estimates that the number of consumers entering the equity release market rose by 36 per cent last year and it expects this trend to continue.
The report says that as people see a continued fall in their income post-retirement and a rise in the cost of living, equity release will become an more integral part of financial planning.
Last year, the equity-release market increased by 36 per cent, with £1.16bn released from retired people's homes.
KRS predicts that by 2004, about 30,000 people will take out equity-release plans. It predicts that if the trend continues, by the end of 2010, there will be 671,223 equityrelease customers releasing £9.99bn.
There are several reasons cited by KRS for this growth. First, increased life expectancy, income levels falling by around 55 per cent on retirement and the rising cost of living.
KRS estimate the UK's retired homeowners now have over £1trn of equity in their home. This is an increase of £444bn since 1998.
The report also found that a growing proportion of the schemes are being sold thr-ough IFAs, with 84 per cent of advisers saying they will now consider offering advice on equity release.
Managing director Colin Taylor says: “At the start of 2003, there were only 11 Ship member companies offering equity-release schemes and now there are 18. This has not only meant greater choice for people but also lower rates as increased competition forced them down by around 0.139 per cent.”