The financial news at the moment is full of doom and gloom within the mortgage and loan markets, with potential borrowers unable to secure the loan amount they require and lenders being unwilling, or unable to offer loans or mortgages to anyone who has anything less than a squeaky clean financial record a large deposit. As a result of this, the number and amount of new mortgages has fallen dramatically over the last few months.

The same cannot be said for the equity release market, which appears to be enjoying a healthy level of growth at the moment, according to Safe Home Income Plans (SHIP), the trade body for equity release providers.

The latest figures from SHIP show that the amount of funding raised through equity release loans granted during the second quarter of this year has risen to £275.7 million, as opposed to £242.7 million for the first quarter of the year, giving an overall increase of 14 per cent in just three months.

These figures highlight the fact that many individuals who have retired, or are approaching retirement are starting to feel the effects of the rising cost of living, coupled with the fact that many people’s pension plans have fallen short of their expectations, either due to poor fund performance, or a lack of previous funding and as a result are in the position of being “asset rich but penny poor”, with a large amount of equity tied up in their home, but little or no money in the bank.

The director general of SHIP, Andrea Rozario, said “These figures serve to highlight the distinctly different forces that drive the equity release market relative to the mainstream market, including the fundamental pressures on the UK’s ageing population, falling levels of pension contributions and the very high levels of personal wealth held in housing equity.”