Credit broker Free2 has launched an unsecured loan for the over-55s who, it says, are locked into annuity and final salary pensions.

Customers in the 55 to 70 years old age range can borrow from £5,000 to £150,000 and from five to 20 years depending on their age (with all loans having to be paid back by the time the customer hits 75 years old).

The loan will be written off if said borrower dies during its term with no liability to their estate.

In order to apply, borrowers must have their own home, which the firm says demonstrates sensible financial planning, and have sufficient guaranteed income, of which a UK state pension may form a part.

A person born on 09 July 1965 who has not smoked within the last 10 months and wishes to borrow £10,000 over a five-year term would be looking at a fixed monthly payment of £204.73 – a 7.4 per cent interest rate.

free2 has also created its own proprietary platform, which it says automates large parts of the application process and helps detect potentially vulnerable customers.

Founder and chief executive Paul Lindsay says: “We think that most financial services companies have not kept pace with the changing demands of the over-55s. We believe that people who can comfortably afford to do so should have the freedom and choice to borrow to maximise their options in retirement.

“If you’re over 55 and receiving an annuity you can’t access a lump sum from it, unlike those who retired after 2015 who enjoy pension freedoms. It’s also extremely difficult to borrow large sums of money, particularly over the long term.

“The over 55’s unsecured loan caters specifically for this market and is designed to help customers finance important plans at this point in life. It is also more than likely that families will need help and support from relatives more than ever in light of Covid-19 as we move into uncertain territory.”