New figures reveal thousands of homeowners are releasing cash from their homes to side-step inheritance tax or to fund their retirement.

Growing numbers are using cash tied up in their property to meet a shortfall in their pension income or to give money to children and grandchildren. A record £1.4billion was loaned through ‘equity release’ mortgages last year — almost £4million a day!

Others are spending their property wealth on anything from home improvements to holidays. Experts said some homeowners want to unlock the cash in their house and enjoy it before it could be swallowed up in care home fees in later life.

The equity release market grew by nearly a third between 2013 and 2014, as people used it as a way to get money without having to downsize or move house. Finance experts say the trend will continue as the post-baby boomer generation find they have insufficient funds in retirement to support their lifestyle.

Early inheritance is a strong driver at the moment for those taking out equity release plans. It means that many can help out younger family members now, when the money is needed.

But there are warnings these loans could double in ten years as high interest rates are rolled up, threatening to erode any savings on inheritance tax.

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