Doors Close at Bank of Mum and Dad
Writes Dan Drage dan.drage@consumerchoices.co.uk
UK teenagers may have to (whisper it) get part-time jobs this summer as the bank of Mum and Dad goes into meltdown.
Teenagers looking for a six week free ride this summer may have to adjust their expectations somewhat. Latest research conducted by AXA reveals the Bank of Mum and Dad has tightened its lending criteria considerably since the credit crunch took hold of the nation’s economy.
Lending between parents and children has taken a sharp decline since this time last year, and in extreme cases free handouts have been removed completely.
Around five million parents (38%) have taken measures to combat tough times with the result that children are now feeling the effects of the economic downturn vicariously.
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"The 11 – 15 year old category are most likely to be refused credit from their parents"
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Similarly, 2.2 million parents have curbed their children’s spending by reducing the amount of cash they hand out or by cutting their kids' allowance completely in the past six months. 21% of all parents who responded to the survey have encouraged their children to save rather than spend.
Although one in ten parents of 16 - 18 year olds say they have stopped lending money to their children altogether, it is the 11 – 15 year old category that are most likely to be refused credit from their parents. One in six parents of 11-15 year olds say they have cut the amount of cash available for purchases outside of their children's normal allowance.
Alison Green, spokeswoman for AXA, had the following to say:
“The Bank of Mum and Dad has so far been quiet on the issue of how it will deal with the effects of the credit crunch. But now it has come out and shown teenagers have been hit hard”
She continues:
“Over half of the teenagers we polled said their parents give them money if they run out and one in five knows they will get what they want if they are persistent enough. So there are plenty of young people who have got used to getting what they want, when they want it.”
This new trend will hit these teens where it hurts, in the pocket.
Chris Eagle, Commercial Manager at Credit Choices, is a fan of the FSA financial training site:
“For those teenagers who would rather learn how to manage their finances than perpetually ask for parental handouts, take at look at the FSA What about Money? site. It’s a one stop, impartial guide on how to budget and save but still have enough money to enjoy yourself.”
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