It is estimated that 1 in 3 pensioners still have to make mortgage repayments with an average debt of £43,069. This is partly due to the failure of endowment policies to repay mortgages as planned and partly through poor financial planning.

As a result many pensioners are investigating the possibility of releasing equity from their houses to make the repayment and provide surplus cash.

With equity release schemes, you take out a lifetime mortgage which releases cash from your home but there are no repayments to make. Interest is charged until you die, the current rate is circa 6%, and then the total is repaid from the sale of the property via the solicitor who handles your estate.

There is another form of equity release called a “reversion scheme”. Here you sell a percentage of your home to the reversion company and when you die, the company claims the percentage you sold from the proceeds of the house sale.

These types of schemes are becoming much more popular but you must take professional advice before entering one of them.