The post-war 'baby boomers' now reaching their 60s have had all the luck - rising house prices, free NHS medical care, cheap energy, final salary pensions (gold-plated and index-linked in the public sector), and virtually free higher education. So why are they hard up?

A new report from Help The Aged and Barclays - with research by Bristol University's Personal Finance Research Centre - says money worries are forcing many to delay retirement.

New retirees, it says, often face "the double whammy of living on a fixed income while managing existing credit commitments" - because a quarter of all people approaching pension age have outstanding consumer credit commitments.

Half of households headed by someone in their 50s are still repaying a mortgage, as is one in eight over-60s.

The picture on personal loans is worse. Credit users in their late-50s and early-60s owe, on average, at least four times as much in unsecured credit as their counterparts did a decade ago, says the report.

"Some people approaching retirement owe substantial sums of money in unsecured credit, with a few individuals owing very high amounts," it says.

"The mean amounts owed by credit users in their late-50s and early-60s are higher than for any other age group."

David Sinclair, Help The Aged head of policy, said: "We know from working with older people that even owing a relatively small amount of money can cause untold misery for those on fixed incomes."

The report confirms a squeeze on older households which has intensified in recent months: the 65-74 and 75-plus age groups are seen by Alliance Trust as hardest hit by rising food, petrol and energy costs, and soaring council tax bills.

It also throws a fresh light on the question of equity release - to unlock £1.37 trillion which over-60s have locked up in bricks and mortar. Many financial advisers say equity release is a bid for security which some later regret.

Once homeowners take equity release, it is extremely difficult, probably impossible, to buy another home. Some will see most of the equity in their home wiped out. The earlier you use equity release, the heavier the impact on your finances.

Several providers offer plans from a minimum age 55, with maximum loan to value (LTV) of the property of ten to 22.5 per cent.

But a loan of £50,000 at a fixed rate of 6.5 per cent, plus set up fees, grows to £178,000 in 20 years.

If house price rises slacken off, equity release can take away a large slice of your wealth. But the Help The Aged survey suggests more homeowners will eventually consider equity release - unless they want to finish up "asset rich and cash poor".

Equity release also attracts people who can't face the hassle of moving to a smaller home or new area for their final years.

Nigel Barlow, head of retirement income solutions at Just Retirement, a life assurance company specialising in equity release, says the average home involved in equity release is worth £220,000, and average household income £25,000. The average age of homeowners is 70 - which means less time for interest charges to roll up.

Stuart Castledine, managing director of Intune, the financial services arm of Help The Aged, said: "Equity release works like a pension in reverse, with compound interest increasing the debt.

"A small difference on the fixed rate on an equity release mortgage can make a five figure sum difference to the amount to be paid off 15 years later."

At Intune, the aim is to give advice across different products from 25 providers. In about 50 per cent of cases, applicants are advised to use some other method of stabilising their finances.

In 2007, just over 29,000 retirees released £1.4bn from the value of their homes, against £1.1bn in 2006, mainly by three different products: Home reversions: owners sell part or all of their home to a provider in exchange for lifetime rent free occupation and a lump sum decided by age.

At 65, owners can expect to get 35 per cent of the value of their home as a lump sum, possibly 40-45 per cent over 70. Regulated by the Financial Services Authority (FSA) since April 2007, reversion plans account for six per cent of the market - just over 1,500 plans, worth £83 million, in 2007.

Drawdowns: a homeowner draws down' cash in stages as and when needed, with interest rolled up' into the total figure to be paid off when a home is eventually sold. Demand for drawdowns surged from 23 per cent of the market in 2006, to over 50 per cent in 2007, around 14,000 plans in all.

Standard lifetime mortgage: cash lump sum provided at the start with no monthly repayments. Accounted for 43 per cent of the market in 2007, down from 69 per cent in 2006. In London, average equity release in 2007 was £93,000 and in the south-east £60,000.

Nigel Barlow at Just Retirement said: "It is vital homeowners choose a product which works best for them.

"For example, interest-only fixed rate mortgages from Stonehaven at 6.41 per cent (AER) and Scottish Widows at 7.22 per cent, both advance a lump sum to pay off more expensive credit cards and personal loan debt. The debt is fixed so long as the owners continue to pay off the interest.

"These plans unlock a minimum £10,000 (SW) and £15,000 (Stonehaven) - with an option of converting to rolling up interest at any time. Only at that point are owners facing a rising debt charged eventually against the value of their homes."

Stuart Castledine at Intune said: "Although people in difficult situations might take equity release at 55, it is a potential option for most people from their 70s onwards, and most people roll up interest.

"People generally use equity release to supplement their income. For them it will be inappropriate to borrow £100,000 to purchase an annuity which will pay an income.

"Usually, it will be better for them to take £10,000 and open a credit line which will provide more money as and when they need it."

Because equity release providers assume house prices will continue to rise in the long term, interest rates on equity release loans have been little affected in recent weeks.

Just Retirement's cheapest loan is 6.05 per cent, its maximum advance 40 per cent LTV. Intune currently has Norwich Union loans from 5.99 per cent, cheaper than applicants get by going direct to the company.

Just Retirement (0800 015 0996 and Intune (0845 230 0820 a Newcastle BS Equity Release Service Key Retirement Solutions 0800 531 6027 Leading providers of equity release plans including Prudential, Norwich Union, Standard Life, Stonehaven and Home & Capital Trust all belong to SHIP (Safe Home Income Plans) which operates a guarantee to ensure equity release cannot generate a debt greater than the value of the home. SHIP enquiries: 0870 241 6060.