More than half of equity release customers are using funds raised from their homes to either pay off unsecured debts or mortgage loans, Key Retirement’s Market Monitor has revealed.

Nearly a third (31%) of customers used at least some of the cash raised to pay off unsecured debts such as credit cards or loans in quarter one 2015, up from a quarter (26%) in 2014.

Over the same period the number of customers using funds to pay off mortgage debts also rose from 21% to 23%.

equity release is most commonly used for home and garden improvements, with three in five (61%) releasing the funds for that purpose. A quarter (26%) also use the money to spend on family and friends.

Dean Mirfin, technical director at Key Retirement, said: “Debt in retirement is a growing issue with large numbers of customers using money to clear mortgages as well as credit card debts and loans.

“That highlights a real need for lenders – including Equity release providers – to develop solutions to help.”

Typical equity release customers released £66,730 in the first quarter of 2015, up from £61,200 in the one before, while in London the average was nearly £130,000.

Overall £341m was released in the first quarter, up from £330m in the final quarter of 2014.

Across the country six out of 12 regions saw growth in the value of property wealth released, with Northern Ireland recording a 40% rise and London a 28% increase.

But at the other end of the spectrum the total amount released dropped 34% in the North West.