About a third of the UK population are now at least 50 years old with a combined wealth estimated at £560 billion. High street banks and other financial services companies are becoming focused increasingly on this lucrative market, but are the products offered exclusively to the over50s the best option? Here Times Money looks at what is available.

Current accounts

One of the latest offerings vying for the attention of older consumers is the Premier 50 account from Alliance & Leicester. For a monthly fee of £10, the account offers a 12-month fee-free overdraft and credit interest of 7 per cent on balances up to £2,500 until January 31, 2009, after which it will track the Bank of England base rate minus 1 per cent.

The account also includes annual worldwide travel insurance for all customers under 80 years of age, access to two private outpatient consultations, up to £750 towards outpatient diagnostic testing each year and the chance to take out an A&L PlusSaver account paying 6 per cent.

Mike Naylor, of uSwitch.com, the comparison website, says: “This account is open to new and existing customers and includes a range of benefits. However, customers need to make sure that they read the small print carefully.”

One reason for this is that the 0 per cent overdraft facility could cost up to an additional £60 a year after the first 12 months. On the plus side, however, each joint account holder is entitled to two private outpatient medical consultations and the annual worldwide travel policy, which caters for people up to the age of 79, is also likely to prove popular because many older people struggle to find competitive independent travel insurance.

But Mr Naylor adds: “Just because a product is aimed at older people it does not necessarily offers the best deal. For those customers who do not require worldwide travel cover, the £120 a year account fee may be an unnecessary expense.

“They could, therefore, be better off with a fee-free alternative, such as A&L’s Premier Direct account, which pays 6.5 per cent credit interest on up to £2,500 until January 2009, or the Abbey Account, which pays 8 per cent on up to £2,500 for the first year, provided that you pay in £1,000 a month.”

Credit cards

As with current accounts, cards aimed at older customers may not offer the best deal. At 16.9 per cent, Saga’s credit card for the over50s is far from competitive. Furthermore, its main selling point of having no extra currency charges in Europe and only 1 per cent worldwide compares poorly with Nationwide, which does not charge for any foreign currency withdrawals. The standard rate on the Nationwide Gold Card is also a full percentage point lower at 15.9 per cent, making it a better choice for globetrotting over50s.

If fee-free foreign currency is not a concern, there are plenty of other good deals. For example, cardholders who clear their balance in full every month can take advantage of American Express’s latest Moneyback offer. The card pays a 5 per cent cash-back on spending within the first three months, after which it returns up to 1.5 per cent on all purchases, depending on usage levels.

It does have a standard rate of 18.9 per cent, though, so anyone holding debt on a credit card would be better off with a card charging a low standard rate, such as Barclaycard’s Simplicity Visa, or one with a cheap introductory offer. The latter includes Halifax’s Purchase MasterCard, offering 0 per cent on purchases for the first 15 months, and the Virgin Money card, on which you can transfer your balance from another card and pay no interest for 15 months, though there is a 2.98 per cent transfer fee.

Travel insurance

Insurers have long fought for the custom of younger holidaymakers but have been less keen to offer reasonably priced cover for older people. About 90 per cent of travel policies have a maximum age limit and a third of all policies refuse cover to over65s.

Intune, Saga and Age Concern are among the providers that do not impose an age limit. Among general insurers, Direct Line covers people up to 106, the AA up to 79 and Rias up to 99 on single trips. However, premiums typically double at age 65 and again at 70. With Direct Line, for example, a 61-year-old would pay £42.90 for cover on a two-week trip to America, but his or her 65-year-old travelling companion would have to cough up £56.69 for the same cover.

Savings accounts

There are some great deals for older savers. One of the best easy-access accounts for the over50s is Coventry Building Society’s Esavings account.

Sue Hannums, of AWD Chase de Vere, the independent financial adviser, says: “This account pays 6.4 per cent on £1 upwards and has no bonus or strings attached. You can get a slightly higher rate with Leeds Building Society, but this includes a bonus of 0.7 percentage points.”

If you prefer not to go online, the Coventry also offers an over60s easy-access account that pays 6.5 per cent on up to £250,000. However, you can pay in up to only £2,000 a month and the headline rate includes a 12-month bonus of 0.75 points.

Car insurance

Many insurers do not accept new customers over a certain age, and those that do accept drivers over 60 charge much higher premiums. Specialist providers may offer more competitive deals. Saga, for example, charges about £137 a year for a 65-year-old man driving a £6,000 Ford Focus, while a similar Direct Line customer would pay about £160 a year.

Home insurance

While your age can be a problem when seeking car or travel cover, insurers do not usually impose upper age limits for home and contents policies. For example, esure will not offer motor and travel cover to over75s, but it has no such rules when it comes to home insurance.

Asia Manzoor, of esure, says: “The risk curve for motor and travel cover rises dramatically once a person is over 70 years of age.”

However, standard policies from general insurers may not provide cover if properties are left empty for more than two or three weeks, which can be a problem for retired people taking longer breaks. Rias and Intune, therefore, offer cover for up to 60 days away from home.

CASE STUDY: Holiday claim proved painless

Peter Corry, 59, refuses to let the advancing years stop him having fun. However, his winter activities were disrupted last year when he had to cancel a ski holiday to Austria after having heart problems diagnosed.

Fortunately, Mr Corry, left, had paid £132 for annual European travel cover, including winter sports insurance, with Norwich Union and was able to claim for the cost of the trip.

The self-employed business adviser, who lives with his wife, Val, in West Lothian, Scotland, says: “I enjoy skiing and generally go about twice a year. But a month or two before our trip to Austria, I began getting short of breath climbing the stairs. I saw my doctor and an irregular heartbeat was diagnosed.”

The condition meant that Mr Corry was unable to travel. “I was prescribed anticoagulant drugs and advised not to fly,” he says. “I think they were mainly worried that the flight could cause me to have a stroke, although there was also a danger that I would suffer from internal bleeding if I had a fall while they were trying to get my dosage right.

“The travel company said that it was too late for me to cancel my trip, so I contacted Norwich Union to see if it could help. I had to fill in a claim form and get a signature from my doctor, but it was straightforward after that and I was refunded the full cost, minus my policy excess.

“I know that there are specialist insurers for the over50s, but I have always found the general policies offer better value for money.”

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