The research, commissioned on behalf of Just Retirement, showed that of the1.7 million pensioners classified as being in poverty, 60% owned their own homes outright.
Stephen Lowe, group external affairs and customer insight director at Just Retirement, said: “The squeeze on pensioner income is very real and only likely to tighten in the coming decades as defined benefit schemes are replaced by less generous pensions and the state is forced to focus its limited resources on those who need it most.”
The report uses economic modelling to quantify the benefits that tapping into some of that wealth, estimated to stand at £750bn of unmortgaged equity, might bring.
It uses the example of a notional drawdown plan aimed specifically at giving a longer-term income boost to pensioners by allowing them to extract £5,000 a year for 12 years.
The data showed between 3.8 million and 22.8 million pensioner households could be lifted out of poverty for a year between 2012 and 2040.
Lowe said it is now a question of raising awareness of the options that equity release offers pensioners in supplementing their income.
He said: “The next step is to take the report out to mortgage brokers and independent financial advisers to build interest from professionals to engage with equity release more by showing them what it can do and how big the potential market is.”
But Lowe said that the government and the opposition need to be more vocal in their support for equity release as a viable solution to the problem.
He said: “We are calling on Norman Lamb, minister for care, and Jeremy Hunt, the health minister, to urgently put equity release on the political agenda and support the industry by being more audible about the benefits of products using local authority channels and the Money Advice Service.”
He added: “Consumers are looking to the government for greater clarity and they are also seeking reassurance that equity release is a safe, well-regulated product that might legitimately be considered in the planning of
retirement income.”
