Not upheld: irresponsible lending - failure to assess affordability into retirement complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr W, a sole trader, took out a £30,000 Bounce Back Loan from Barclays in December 2020 and has maintained all payments. In 2025, he informed Barclays he intended to retire in January 2026 due to health issues and expected to be unable to continue repayments thereafter. He complained that Barclays acted irresponsibly by not assessing whether the loan would remain affordable into his retirement and by not providing sufficient support in advance of his retirement. The ombudsman did not uphold the complaint, finding that the BBL scheme was an emergency government measure that specifically did not require affordability assessments and instead relied on borrower self-certification. The application process made clear to Mr W that Barclays would not carry out affordability checks and that he was responsible for assessing appropriateness. The ombudsman found it would be inconsistent with the scheme's design to expect Barclays to conduct even partial affordability checks, and noted that Mr W had chosen to extend the loan term in 2021, indicating his decision to continue with the longer-term arrangement.

The Ombudsman's reasoning

The ombudsman found that the BBL scheme was fundamentally different from standard lending products because it was designed as an emergency government measure where lenders were not required to carry out affordability or credit checks. Instead, the scheme relied on self-certification where borrowers confirmed they met eligibility criteria and accepted responsibility for assessing whether the loan was appropriate. The application process made this clear to Mr W. The ombudsman rejected the argument that Barclays should have conducted even a partial affordability check (such as considering age and retirement), as this would be inconsistent with the scheme's design which specifically removed the requirement for any affordability evaluation. The ombudsman noted that Mr W had the opportunity to reflect on his repayment commitment when he chose to extend the loan term in November 2021, indicating this was his decision. Since Mr W is currently maintaining payments and has not yet reached financial difficulty, the ombudsman found it reasonable that Barclays had not put in place a formal arrangement in advance, and that they had provided appropriate support through PAYG options and signposting to debt advice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website