Research from mortgage lender Birmingham Midshires shows that almost 50 per cent of those over 55 are anxious about how they are going afford their retirement. Only 10 per cent are deemed confident that they will be able to live comfortably in retirement.

These concerns over inadequate retirement savings are influencing one in eight people to look into equity release to help pay for their retirement.

If suitable for you, equity release can raise a tax-free lump sum or regular additional income, helping you pay off any mortgage you may have, giving you more disposable income to use as you wish every month.

Safe Home Incom Plans (SHIP), the industry body that was set up by the leading plan providers for the protection of plan holders, found that some sale-and-rent-back companies were portraying themselves as a form of equity release. However, unlike the sale-and-rent-back industry, equity release which includes lifetime mortgages and home reversion plans are fully regulated by the Financial Services Authroity (FSA) giving plan holders peace of mind that comes with a fully regulated industry.

SHIP has therefore set up a check list to clear up the confusion because unlike sale-and-rent-back schemes all equity release plans come with the guarantee that you can remain in your home until you pass away or move into long-term care, with no fear of repossession.

Increasing numbers of people will be feeling the effects of the recent events in the economy. There is a risk that people with private pensions that are invested in the financial markets may have seen their investments fall in value.

However, for those who are 55+ and homeowners, equity release could be the perfect solution. By using their homes to raise a tax-free lump sum or regular additional income, the over 55s could keep their standards of living consistent by using the funds released to supplement their pension income.