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Older people often find it more difficult to obtain loan approval than their younger peers. 

The justification given by banks and lending agencies stems from concern over whether older applicants will live long enough to pay back the loans offered. 

An independent review of the Banking Code conducted by banking consultant and former Bank of England executive Mike Young recommends that banks take pains to avoid such discrimination. 

Meanwhile, a representative of the British Banking Association gave the opinion that the Code should not be altered on this matter – factors, such as age, that contribute to a proper assessment of loan viability should not be dismissed out of hand, nor should they become obstacles to good lending policies. 

Mike Young’s report, which was received last month to mixed reactions, recommended greater clarity on loans and savings accounts and a more responsible attitude towards consumers who represent a credit risk to banks. 

The report was criticized by consumer groups for not being tough enough on issues such as bank charges. 

The right of lending institutions to practice age discrimination has been upheld, the BBC reports.

By the new year, the credit crunch will be in full swing, and people seeking a personal loan or mortgage are being urged to apply before Christmas. If they wait, they risk losing out entirely. 

Loans are becoming more difficult to secure – one in ten lenders abandoned the market after GE Money, Leeds BS and LV= announced they would no longer be offering unsecured loans. There is no sign of a letup and people are being warned to prepare for increasingly turbulent market conditions. 

Esther James, personal finance analyst for Moneyfacts.co.uk, is advising anyone considering a personal loan to act quickly. 

“With less choice, a more cautious lending strategy and the impending decision on payment protection insurance sure to shake up the market, the 2008 loan market could look very different,” she said. 

Not only is the borrowing process becoming more stringent, but wait times are also increasing. Lenders are making people wait. 

Katie Tucker, technical manager at mortgage broker John Charcol, offers the following explanation: “The credit crunch means that even the balance sheet lenders who have funds available are in no hurry to price themselves into popularity because it could bury them in business and ruin their service levels.” 

At the Woolwich, for example, calling for an update means queuing for an hour, and getting a new application even looked at involves a wait of at least a week. 

Tucker emphasized that it is vital for borrowers to allow extra time for applications.  The temptation to delay until after Christmas could cost remortgage customers an unexpected month on an unfavourable high rate if they revert to their lender’s SVR while they are waiting.