Kids 'to start feeling the effect of the credit crunch'

By Sarah Engle, Fri 11 Jul 2008 - Published in Loans

Youngsters who are expecting to tap their parents for loans in order to fund their summer holiday fun could be disappointed, according to research by AXA.

The study has found 38 per cent of parents have introduced stricter lending criteria as a result of the credit crunch, with 17 per cent reducing the amount of cash they hand out or cutting their children's pocket money completely.

Kids aged 11 to 15-years-old are most likely to be turned down when they request cash, with 17 per cent of parents cutting the amount of cash available for purchases other than their normal allowance.

Alison Green of AXA said "finances [are] stretched to breaking point for the first time in years".

She added: "Parents are getting tough and kids are not going to like it."

This comes after Skipton Building Society research found children had largely avoided the effect of the current economic downturn, with nine out of ten youngsters receiving the same or more pocket money than they did a year ago.

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