A think tank has called on the government to help people access the money tied up in their property by working with insurers to create a new equity release product.
The Social Market Foundation, which published the report in conjunction with equity release main player Norwich Union, said a growing number of "asset-rich" people would benefit from easier ways to unlock the capital in their properties.
Under the SMF's proposals, the new Home saver product would work in a similar way to traditional equity release products, under which retired people can borrow a lump sum against the value of their home and repay it once they die or sell their property. Interest is usually added to the total amount owed.
The SMF scheme would be managed by government or a central authority in order to make it viable to offer equity release to homeowners excluded by the existing market, such as those needing to release small sums, or those who live in deprived areas with lower value properties.
The new product would also be available to people in their 50s - below retirement age - to help those who have lost their job or are unable to work. These people might not qualify for government help because of the value of their assets, but would benefit from being able to unlock some of the equity in their home.
SMF director Ann Rossiter said: "An increasing number of people are homeowners, but many are asset-rich and income-poor. Finding a way for these homeowners to access the wealth in their homes is essential if we are help people cope with life's uncertainties and avoid a generation of impoverished pensioners."
A Homesaver product could be used to fund short or long-term illness, or the ever rising cost of care for those unable to look after themselves.