is this legal? (being allowed to drive if you are colour blind?)
Yes, perfectly legal. In practice the only thing that's really affected is traffic lights
[1], and not in the way that people with normal colour vision assume
[2]. Spotting vulnerable road users in $generic_poo_colour clothing is a basic driving skill, even if you're not colourblind, because sometimes it is actually generic poo colour.
Train drivers and pilots and so on have tougher colour vision requirements, because they have to be able to discriminate coloured signal lights at a distance.
I'm not sure what being elderly has to do with it? Most colour vision deficiency is congenital. If a person suffers from, say, macular degeneration, then the loss of central vision is a far more serious issue and they rightly shouldn't be driving.
[1] Okay, cats eyes road studs on the motorway are colour-coded, but if you need the colours to tell what the lanes are, you're doing it wrong.
[2] The issue tends to be one of recognising that a distant light at night is a traffic signal, rather than some other random luminaire. Telling the state of a known traffic light once you're close enough for it to matter isn't a problem, as the colours are chosen to minimise ambiguity, and it can be done by shape if necessary.