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Over 50s at risk of personal loan debt eating their savings

Alicia Hempsted
Written by  Alicia Hempsted
Kara Gammell
Reviewed by  Kara Gammell
5 min read
Updated: 31 Jan 2025

Findings from MoneySuperMarket show that many people over 55 are taking out personal loans, which may put them at risk of being unable to pay off the debt before they retire or pass away.

Mature woman driving a car

One in six personal loan applications are made by those approaching retirement new research reveals.

According to MoneySuperMarket data, 16% of those applying for a loan were over 55 and a quarter (25%) of those applications borrowed more the £15,000*.

While most UK lenders have an upper age limit of around 75, taking out a substantial loan later in life can put many people at risk of being unable to pay it off before they retire or – in a worst-case scenario – pass away.

For a lot of families in the UK, this debt could take a considerable chunk out of their savings, leaving their families with not much left to cover funeral costs or essential expenses if they had been relying on the deceased person’s income.

There's also the risk of interest adding to the debt, making it more expensive to pay off if you can't afford to make larger repayments.

According to our loan calculator, a £10,000 personal loan with an interest rate of 9.9% APR will cost you an extra £5,500 to pay it off in ten years

Home improvement was listed as the number one reason given by over 55s for taking out a loan, with car-related costs being the second-most popular reason

One solution to ensure loved ones are provided for after death would be a life insurance policy, but our data suggests that many over 50s lack this valuable protection.

The value of a life insurance is that the payout is not counted as part of someone’s estate. It is a gift to their loved ones and family that can bypass the probate process, so there is no risk of it being used to cover any remaining loan debt and can be handed to loved ones sooner to help cover necessary expenses.

But in a MoneySuperMarket life insurance survey, only 18% of people over 55 said they owned a life insurance policy – either through work or a personal policy. It was even admitted by 46% that they had never before even gotten a quote for life insurance**, with many giving the reason that they thought it might be too expensive.

The cost of life insurance typically increases as you age, but our latest life insurance data has shown us that it’s still possible for over 50s to get affordable cover, with applicants aged 65-69 only paying around £2 more per month for life insurance compared to policyholders under 50.

Kara Gammell, personal finance expert at MoneySuperMarket, says “The key to keeping the cost of your life insurance down is to shop carefully for your cover. Many over 50s don’t have to worry about paying off a mortgage or supporting young children, so they can choose shorter policy terms and lower payouts to reduce their premiums.”

Over 50s be cautious when shopping for life insurance

If you’re over 50, you still have plenty of options for life insurance, but there is something to be wary of if you’re looking at specifically over-50s plans or policies with guaranteed acceptance.

Life insurance plans that offer a guaranteed payout with no term limit or age limit can be considerably more expensive than a standard life insurance policy, and because you are required to continue making payments until your death, you may be at risk of paying more into the policy than it’s worth.

Once you have paid into an over-50s plan, you can’t get your money back and missing a payment means voiding your cover.

So, it’s possible that you may be stuck making these payments to get the payout even if you have paid in premiums more than the payout is worth.

But it should be noted that while this is a risk you may be exposed to with these types of policies, that doesn't mean that will always be the result.

People who are older or in poor health may find over-50s plans a good option for them as there is typically no need to provide your medical history like you would with a standard life insurance policy.

Before choosing your policy, consider your options and shop around.

Many standard life insurance policies have upper age limits that go as high as 70, so it’s worthwhile to check what kinds of policies you’re eligible for and compare prices to get the best deal for your cover.


* Data based on personal loan applications made through MoneySuperMarket from 01/09/2024 tto 30/09/2024 where applicants are over the age of 55

** All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2151 adults. Fieldwork was undertaken between 19th - 20th September 2024. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).