Whether we avoid turning on our televisions, logging onto the internet, or turning the pages of a newspaper, we cannot avoid the credit crunch. It’s a major part of everyone’s life and no matter where you hide it will find you.

If it’s yourself who does the weekly grocery shopping, or if you own a car, or pay the bills, you’d have found the continuous rises of food, fuel, gas and electricity prices. Most people are now suffering from the effects of the credit crunch as money, being the major pillar in supporting a family, is becoming harder to keep hold of.

But it’s not just food, fuel, gas and electricity prices that are causing difficulties. As banks can no longer afford to hand out money and have become reluctant to lend. Mortgage lenders too have become reluctant to lend resulting in bad news for first time buyers as the final 100% mortgage was wiped out only a few months ago, leaving an extensive effect on many families and first time buyers.    

The ripple effect

As money is the key in the ability to support oneself as well as a family, the increase in living costs has led more people to cut back on luxuries as a remedy to fight the crunch. Fast food stores, holidays, new cars, the latest electronic gadgets and up to date fashionable clothes are pushed to the side as more people focus on saving.

Acting as a ripple effect, businesses are being hit and not making enough profit resulting in the loss of jobs for a number of employees. According to theherald.co.uk, JJB Sports had reported a loss of £9.7m in six months as a result of the credit crunch, while the number of redundancies had increased by 14,000 to 126,000 in the last three months.

Retail analyst, Clive Black, of Shore Capital Stockbrokers, said: "There will be more companies finding it difficult and the banks aren't in a position to help them as much after the credit crunch, so there will undoubtedly be more casualties down the line."

People are also cutting back on gas and electricity as prices increase. According to the research from charity Age Concern, over a half of Britain’s pensioners are cutting back on heating and food to cope with the effects of the credit crunch.  

Picking up the pieces

As Britain tries to pick up the pieces and re-build the economy, Pensions reform minister, Mike O'Brien, said: 'Pensioners are feeling the effects of rising food and fuel costs. That's why we're spending £575million increasing Winter Fuel Payments and from next month we're making it much simpler and more automatic for pensioners to claim benefits.'

Banks are also on their way to build a support bridge offering savings accounts with high interest rates, persuading more people to save more money.

Yet the meltdown of the mortgage market has resulted in lenders becoming more wary of who they lend to as people struggle to get a mortgage.

Budgeted Christmas?

And what can be expected within the next few months?

According to a survey by the Daily Mirror, one in two Britain’s will not be able to meet the expense of Christmas this year.

As the credit crunch has affected the lives of many people, shoppers may face restrictions this Christmas as the credit crunch may eat its way through our Christmas dinner.