The equity release market hit an all-time high of £1.71bn in 2015, according to research from Key Retirement.
The total value of property wealth released last year rose 24 per cent from £1.38bn in 2014, Key said in its Equity Release Market Monitor.
On average pensioners withdrew £72,000 per household in 2015, with this figure rising to £128,000 in London.
A Key statement says that rising house prices in 2015 helped drive confidence in using property wealth to increase retirement income.
Most of the money released was used to fund retirement, with 61 per cent of those surveyed funding home improvements and 30 per cent using it for holidays.
But debt was a factor for many, with 24 per cent using the money to pay off mortgages and 31 per cent using the cash to settle credit card and loan debts.
Key Retirement technical director Dean Mirfin says: “Property wealth is making a massive contribution to retirement income and planning with pensioners releasing a record £4.7m a day from their homes.
“Sales of equity release plans are rising strongly as well underlining how pension freedoms have widened the choice of retirement income solutions with people now considering their home as part of their retirement portfolio.
“Debt in retirement remains a major issue with large numbers of customers using money to clear mortgages as well as credit card debt and loans. That highlights a real need for lenders – including equity release providers – to develop solutions to help.”