Loan market needs to be clearer and fairer to all

Monday 9 January 2017

  • Headline loan rate is 3.23%APR*, but typically people are being offered 8.06%APR**
  • One in six over 50s turned down for loans***
  • Inflexible lenders not taking into account earnings from pension or investments
  • Saga launches flexible personal loans with one rate for all

The loan market in the UK today is not fit for purpose according to research by Saga Money.  The practice of offering teaser rates to tempt people into applying for a loan, only to be hit with a much higher rate on application, is rife in the market and is unfair to consumers.  The average of the top 10 lowest advertised rates on the market suggest loans are available with an APR of as little as 3.23%, but typically applicants have told Saga that they are more likely to be offered an APR a little over 8%.


There is strong demand amongst the over 50s for personal loans.  One in five over 50s have applied for a loan in the last three years, demand is particularly prevalent amongst people in their 50s, with 30% saying they have applied for a loan, however this age group is not currently served well by lenders who are not in tune with the changing needs of todays over 50s .


They often apply inflexible acceptance criteria, which means that people who are perfectly able to pay off a loan are not offered one, simply because of their age or the amount they earn on a pay slip, regardless of how much income they might have from other sources.  Retirement as we know it is in a state of flux, with people working longer, often reducing their hours rather than stopping altogether, and so people are continuing to earn a healthy income later in life through a combination of wages, pension and investment income.  Yet many providers apply an arbitrary age limit on to whom they are willing to lend money.


Following extensive research with its customers, Saga Money has decided to turn the market on its head, launching a loan with a single rate for all, whether they want to borrow £1,000 or £25,000.  Saga Personal Loans have acceptance criteria tailored specifically for people over 50 and are as flexible as they can be to meet people’s changing needs in the run up to retirement and beyond.


Nici Audhlam-Gardiner, managing director, Saga Money, commented: “Our customers have told us they have a clear need for borrowing later in life, whether that is for home improvements or to pay for children’s education, and they are finding it frustrating to be turned down because of their age or offered rates much higher than the one they applied for.

“These are often people with a pension or investment income or part time earnings who are able to cope well with loan repayments, but find themselves shut out of the market, because only their pay slip is being taken in to account.

“It is time the market changed with evolving lifestyles, which is why we are offering a one-rate-suits-all  proposition, which will take into account the wide variety of income sources people have later in life and also offers flexible repayment options, to help keep track with life’s ups and downs.”             


Notes to editors

*Average of top 10 loan APRs featured on

** Populus interviewed 2,108 nationally representative UK adults, all aged 18+ online between 21st and 23rd December 2016. 1,027 of these respondents were aged 50 or over. Populus then boosted the sample with 348 respondents aged 50 or over who had been accepted for a loan in the last three years, to make a total of 500 respondents overall. Data was weighted to be nationally representative. Populus is a member of the British Polling Council and abides by its rules; for more information  


About Saga Personal Loans

Saga is offering unsecured personal loans from £1,000 to £25,000 over one to seven years. It offers a single, flat rate of interest of 7.9% APR that all successful applicants receive. The loans are provided by Shawbrook Bank Limited

Applicants must be aged between 50 and 75, own their home in England Scotland or Wales, and have a single or combined income of at least £12,000, which includes pensions and income from savings and investments.

Applicants can find out whether or not they will be approved for a loan without it affecting their credit score, initial applications go through a ‘soft’ credit search, without it leaving any trace visible to other lenders. With a soft search, we will let applicants know whether we are likely to approve them for a loan without leaving a mark on their credit score.

Only when people confirm they wish to go ahead with the loan agreement, will the credit search be registered and visible to other lenders.

Share this page

Get In Touch

The Saga Group Communications Team only deal with enquiries from the media.

If you're not a journalist, visit our contact us page for a full list of telephone numbers.