The government should provide pensioners with a telephone advice service to help them decide whether to sell their homes, a report published tomorrow will claim.
Research from the Institute of Public Policy Research (IPPR) suggests that pensioners living in poverty could be helped off the breadline if they downsize their home or take out a form of equity release scheme.
But the IPPR believes this is only possible if an independent financial advice service for older people is established.
"There are almost a million 'asset-rich income-poor' pensioners - those living in big houses but on small incomes," said IPPR's head of social policy, Jim Bennett.
"Because of the complexity of the benefits system, many pensioners are unaware of exactly how their benefits would be affected, and are unable to calculate whether they would be penalised.
"To help pensioners who want to release wealth from their home, the government could help by improving the availability of financial advice, ensuring that there is enough housing suitable for retirement and by helping older pensioners with the logistical process of moving."
IPPR estimates that establishing such a scheme would cost around £7 million.
Their research suggests that a million pensioners live in property worth over £100,000 but are on mean-tested benefits, while half of people living on under £128 a week have three or more spare rooms.