The Equity Release Council (ERC) said £3.95bn ($4.79bn, €4.3bn) was unlocked through equity release between July 2018 and June 2019.
This is a £450m (12%) rise compared to the previous 12 months.
In Q2 2019 alone, £911m was taken out via equity release, which exceeds the total sum that was unlocked over four quarters just a decade ago.
The ERC also said that the use of drawdown mortgages now dominates the equity release market, representing more than two-thirds (67%) of plans taken out in Q2 2019.
Steve Wilkie, managing director of lifetime mortgage experts Responsible Life, said: “Financial flexibility in later life is proving to be a huge draw for older people, and the rise in popularity in drawdown lifetime mortgage products is keeping the whole market on a high.
“Interest in equity release shows no signs of tailing off, but the growing popularity of drawdown facilities against a backdrop of flattening demand for lump sums points to older people’s desire to have more control over their money.
“This growing popularity means providers and brokers cannot get complacent. The sector is likely to continue to grow and the industry must ensure there are enough qualified advisers on hand to meet this demand.
“Equity release has become a mainstay of financial planning for older people and it’s not going anywhere.”
In July, International Adviser reported that Legal & General Home Finance will be rolling out an education programme on equity release services to financial advisers in a bid to improve their knowledge.
Equity release is becoming a separate yet feasible option for retirement funding alongside pension freedoms, which also hit record levels last year.
IA recently reported that in the second quarter of 2019, people withdrew £2.75bn of their pension, a 21% increase compared to Q2 in 2018.
As a result, pension freedoms have now passed £28bn since they were introduced in 2015, with 336,000 people cashing in part of their retirement pot; 27% more than in the same period last year.
Alistair McQueen, head of savings and retirement at Aviva, said that the figures show that people are turning to all their assets such as property and pensions “to fund their later lives, like never before”.