Access to credit falls significantly for the retired

7th January 2014

Up to one in five over-65s have borrowed money or expect to have to borrow to help boost their retirement income research from Key Retirement Solutions shows.

Its nationwide study shows demand for credit among the over-55s remains high with around 22% applying for credit cards, loans or overdrafts in the past year – among the over-65s the number applying is around 16%.

But they run significant risks of being rejected with 12% of over-55s being turned down for some form of credit – they are most likely to be rejected for credit cards with 70% of those who have been turned down being refused a new card while 26% have been rejected for a loan and 13% have been refused an overdraft increase.

Key’s analysis shows the choice and range of credit available drops significantly with age – the average under-65 with good credit can choose from up to 85 personal loans. But that falls to 44 loans for those aged 65 and to 37 for those aged 70. Over-65s without good credit ratings will only be able to apply for four or fewer loans.

Credit card companies do not impose age limits for new applicants but may impose minimum incomes while mortgage lenders impose age limits on loans. The research shows the average over-65 who has unsecured debts owes around £3,720 while those aged 55 and 64 owe an average £4,300.

Many do not expect to clear their debts before retirement – 27% of those aged 55 and over do not expect to be debt-free excluding mortgages before they retire and 25% of over-65s say they have not cleared debts. Around 4% of over-65s say they’ve had credit card limits cut in the past 12 months.

Dean Mirfin, Group Director at Key Retirement Solutions (, said: “Access to credit is a major issue for the over-55s and more particularly for the over-65s as demand remains high while lenders remain wary and the risk of rejection is high.

“Nearly one in five over-65s expect to or have already borrowed money in retirement and the ability to borrow is important in order to be able to fund major expenses and maintain their standard of living.

“Recovery in the wider economy is feeding through to pensioners but low annuity rates and the lingering effects of endowment mis-selling means retirement incomes remain under pressure.

The table below shows the use of credit by the over-55s and how many owe money on different forms of credit across the country.

REGION Personal loan Credit card Overdraft DO NOT OWE MONEY
East Midlands 19% 54% 36% 40%
East of England 45% 60% 22% 33%
London 12% 32% 12% 54%
North East 14% 35% 9% 52%
North West 45% 23% 8% 31%
Scotland 16% 37% 12% 49%
South East 20% 35% 18% 55%
South West 9% 45% 21% 42%
Wales 13% 43% 11% 46%
West Midlands 7% 37% 10% 54%
Yorks & Humberside 24% 52% 20% 38%
GREAT BRITAIN 24% 40% 17% 43%

The Consumer Intelligence research conducted online between December 3rd and 8th among a nationally representative sample of 1,431 adults aged 55+

1 thought on “Access to credit falls significantly for the retired”

  1. george says:

    I have not (yet) experienced any problems in obtaining credit. However travel insurance is a rather different matter.

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