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Credit crunch hits 'bank of Mum and Dad'

Parents are loaning their children less as a result of the credit crunch.New figures from insurers AXA show that the "Bank of Mum and Dad" is experiencing similar revenue-raising problems - and has tightened lending in a similar way - to the global banks affected by the financial crisis.A total of 17 per cent have reduced their loans to their children - while one in ten have stopped them altogether.Moreover, 38 per cent of parents say that they have "taken measures" to lessen their spending, as the credit crunch-induced economic slowdown continues.Alison Green of AXA commented: "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."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."She added: "But all that may change as parents find their finances stretched to breaking point for the first time in years. Parents are getting tough and kids are not going to like it."

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