Thousands of pensioners could be forced into equity release schemes as millions of households across a wide swathe of England get hit with massive hikes in council taxes when the new property tax bands are introduced.

At the moment the tax is calculated using the 1991 estimated value of the property but soon the value used will be that on the 1st April 2005. Soaring house prices will have pushed the value of many homes into the next tax band, possibly even two or three bands higher.

A report released yesterday by Professor Merlin Stone, of Bristol Business School, showed 100,000 pensioners released equity in their homes worth £3.96 billion in the past year - with the figure set to rise as more retired people struggle to make ends meet.

The report also predicted around 152,000 retired homeowners will release £9.3 billion over the next three years, with another 752,000 yet to decide how much to release.

According to research carried out by the Liberal Democrats, London will be hit hardest by the new tax bands but tax bills could rocket by £300 in more than 60 regions across London and the South East.

Towns where house prices have risen faster than the National average will suffer and this included many places across the south and west of England.

Many households are already facing whopping council tax increases as well as water and fuel rises that far outstretch pension increases so the band rate increase, expected to be levied from 2007, will come as a double or treble whammy.

Particularly hard hit is the West Country where several pensioners have said they would go to jail rather than pay council tax increases already imposed. So far the Courts have held back from this or fines have been paid anonymously. Albert Venison, chairman of the Devon Pensioners' Action Forum, said he found the latest tax onslaught "worrying, but not surprising". Mr Venison said: "I think more and more pensioners will have to release equity over the next few years just to survive."