Equity release is fast becoming the only financial solution for the over-65s who do not believe they could afford to live comfortably on the government’s proposed flat rate pension.

Almost two thirds of over 65s do not consider the pension is sufficient to cover living costs even if they do not have to pay rent or a mortgage, according to a study by the Equity Release Solicitors Alliance (ERSA).

The result is more are considering turning to equity release to provide the money to top up the proposed £7,280 a year flat rate pension – for a couple, the pension doubles to £14,560.

Only one in four reckon that the state pension will give them enough cash to live on in retirement.

Different age groups have opposing views about the flat rate pension. Young adults tend to think the payment is enough for a comfortable lifestyle, while over 55s and the retired consider £140 a week is not sufficient.

ERSA chair Claire Barker said: “The government is seeking to encourage greater individual responsibility in retirement planning. As such people will need to carefully assess how they will provide themselves with an income to supplement the proposed new flat rate pension.

“People in retirement face different demands on their income. They are more exposed to specific price rises – such as fuel price hikes – and they may face substantial costs arising from long-term care.

“For many people in retirement their home will remain their largest asset. With the average house price in the UK standing at £161,823 in May, it will make sense that people look to equity release.”

ERSA’s survey also highlighted an increasing number of people are more positive about equity release compared to two years ago, while 19% of people are ‘definitely considering’ equity release to top up their retirement income.

Equity release gives a lump sum or regular monthly payment to over 55s who own their home without any mortgage.

The average equity release amount is £47,323, says industry trade organisation Safe Home Income Plans.

Latest property price statistics put the value of an average home around £161,000.