Donald Fox, owner of broker firm Velocity Mortgages, said that there was “unfairness amongst lenders” with the majority failing to lend to older people.

Lending criteria needed to be changed to help those in employment for longer, said Fox.

“The government, lenders and the Financial Services Authority (FSA) should all be doing more to help support older people in society, not limiting them of financial options,” he explained.

The government confirmed the default retirement age (DRA) will be scrapped from April, so employers will no longer be able to dismiss staff when they turn 65. 

Financial institutions who already lend to people over the age of 65 include Nationwide Building Society, Royal Bank of Scotland and Santander. However, Leeds Building Society is the only lender offering loans up to the age of 80.

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Fox added: “Having spoken to Clydesdale Bank, the lender has already said that it has no plans to change their maximum age for lending and will continue to cut people off at 65.”

A spokesperson from the Council of Mortgage Lenders said that it will be discussing the new retirement age with its lenders in the next few months and suspects that the FSA will do the same.

“The proposed Mortgage Market Review (MMR) states that lenders must take into account foreseeable changes to income when assessing a borrower’s ability to take on a mortgage and retirement is one of these changes.

“There will be a trade off between choosing a set cut-off age for mortgages and allowing the borrower to tell their lender at what age they are going to retire,” explained the CML.

An FSA spokesman said: “We are concerned about whether people can afford payments on their mortgage. Individual lenders assess what maximum age they lend to.”