Stupid Question - Credit Crunch

[blank]

As title says, this is probably a stupid question, but how do "people have no money any more" due to the so-called credit crunch?

Unless you've lost your job, or taken a pay cut, how are people worse off?

From what I can see, lots of people are better off because their tracker mortgages are at a very low rate. OK savings rates have gone down too, but do most people do anything with the interest off their savings anyway?

[Deluded]

they have the same money they had before. Just wont spend it because the media tells them not to.

[Dave_ST220]

blank said:

OK savings rates have gone down too, but do most people do anything with the interest off their savings anyway?

Yes. I used to "blow" it on meals out.

[Chilli]

Given that it seems most jobs could be in danger, people are reluctant to spend their cash, just in case. Also, you have almost no returns on your savings, which many people rely on, and now pension funds have lost so much of their value, retiring folk all of a sudden are faced with living off a lot less cash.

[mcflurry]

Or can't extend their borrowing facility to buy shiny depreciating stuff any more...
i.e. a £2000 plasma, BMW X5 and school fees on the mortgage??