Over 76,000 people accessed equity release products, borrowing a total of £4.8bn in 2021.

This compares with equity release borrowing of £3.86bn in 2020.

The fourth quarter was the busiest ever on record for equity release lending activity. Over 11,000 customers borrowed £1.34bn of property wealth via equity release products from October to December, including £1.2bn via new plans and £153m via drawdowns or further advances.

New customers taking out drawdown plans in Q4 increased their total borrowing by 18% compared with Q4 2020, with an average of £96,699 taken up front and £35,532 reserved for future use. New lump sum plan sizes grew 20% over the same period to £125,911.

For the year as a whole, 76,154 customers took out new equity release plans, made use of drawdown reserves, or agreed extensions to existing plans. This was a 4% increase year-on-year from 72,988, although it remains below the peak of 85,497 seen in 2019.

David Burrowes, chairman of the Equity Release Council, said cost of living pressures was one of the reasons why homeowners are choosing to turn to equity release.

Stephen Lowe, group communications director at Just Group, said he expects to see more advisers recommending equity release in 2022.

He said: “In 2022 and beyond we expect to see advisers become increasingly focused on how people’s property assets can be combined with their other pensions and investments to meet their clients’ retirement aspirations. For example, there will likely be homeowners who have suffered a financial shock during the pandemic or are struggling with a cost of living squeeze and are looking for more creative solutions so they can still achieve their plans.”

Simon Gray, managing director at equity release advisory firm HUB Financial Solutions, said that the post-pandemic rebound in the market showed the drivers for growth remain in place.

He said: “Many people, and especially those whose plans have been knocked off course over the last couple of years or who fear a cost of living squeeze, may still have the same goals and be open-minded to ideas they may not have considered before. Rising home values and interest rates that remain close to historic lows, combined with increasing innovation in the sector, means equity release remains an attractive proposition.”