New research shows that most of the money released from lifetime mortgages is used to finance home improvements, holidays, new cars or to top up income.

Lifetime mortgages are loans secured on a borrower's home made to generate capital - the loan is repaid when the property is sold after death or if the owner moves out.

Nearly 80 per cent of homeowners who have opted for a lifetime mortgage from Norwich Union choose to spend the released cash on home improvements, according to the latest figures.

Over a third of people treat themselves to a holiday with capital released through a Lifetime Mortgage, 31 per cent use the extra cash to top up their income and over a quarter use it to buy a car.

More than two-thirds of customers take between three and 12 months to consider whether to take out a lifetime mortgage.

"These figures show that the majority of equity release money is needed for practical purposes," said Daren Carter from Norwich Union personal finance.

"It's already helping thousands of people to make their retirement more comfortable, either by funding home improvements, filling any gaps in retirement income and making it possible for them to go on holiday."