Nearly a third of customers also used equity release to pay off mortgage, credit card and loan debt.
Dean Mirfin, group director at Key Retirement, said: “Equity release makes a major contribution to retirement planning with average customers releasing nearly £65,000 of their property wealth.
“Attitudes are shifting as pensioners recognise their property investment, if used wisely, can change their lifestyle.
“The launch of pension flexibility will accelerate that process with all the evidence showing people are spending their money sensibly.
“Debt in retirement however is 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.”
The age of the average equity release customer rose to 71 in 2014 from 69 in 2013, while customers’ average property values increased to nearly £260,000 from £238,000 in 2013.
In 2014 11 out of 12 UK regions saw a growth in the average amount of property wealth released.
Londoners led the way, taking out £127,412, 19% more than the £107,224 released in 2013.
