Twenty-somethings relying on parents to access credit

While it's common for parents to give their children funds towards a first home or a wedding, the credit crunch means they are increasingly being relied on to help their offspring secure loans in various forms.

Research by price comparison site moneysupermarket.com has revealed 23 per cent of twenty-somethings - dubbed the 'iPod Generation' - have used their parents as a guarantor when applying for a loan.

Tim Moss, head of loans at moneysupermarket.com, said: "Not only can your offspring eat you out of house and home, but they're increasingly leaning on parents financially too. It has been common for mum and dad to be tapped for some financial help towards a first home, but more and more parents are being asked to act as guarantors on a range of credit applications, including loans and mortgages.

"The tightening of lending criteria across the board has meant it's becoming difficult to even get a credit card or a loan, never mind access the most competitive rate on a mortgage.

"Younger people are especially vulnerable in this climate - they tend not to own a home and are more likely to have missed the odd payment on a mobile phone or credit card. While this may not seem like a big deal at the time, it can have a dramatic impact on your credit record. In today's stormy financial climate, the more credit-worthy you are, the better your chances of being accepted for the best deal."

Across all ages, 11 per cent of people have relied on their parents as guarantors for a loan, with London coming in poorest at 15 per cent.