Lehman Brothers breakdown has left 25,000 people to clear their work desks. Whilst the majority are American, 5000 of these employees are in Britain. This is Britain’s biggest single loss of jobs since the collapse of Rover in 2005 (1). Even if you are not directly affected by this loss of employment, our tax fund is. There are more people unemployed now and we will have to pay them Job Seekers Allowance, so less money the government have spare for our NHS or schools.
It also means there is an increased rate of competition for jobs around Britain. With 5000 more people looking for work, it will be harder to secure a permanent job.
(1)http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4761892.ece

By the close of play on Monday, the FTSE 100 had fallen by nearly 5 per cent in one day. (1). Some may think this only affects those who invest in the stock markets. They would be correct, but the reality is that we all invest in stock markets indirectly.
Individual Savings Accounts (ISA’s) are invested in stocks by banks, whether the stock market is doing well or not varies the amount of interest ordinary people receive on their savings. The government also indulges us into the stock market by backing Child Trust Funds. If the stock market takes a tumble, so do these investments in our children. Due to Lehman Brother’s tumble, the stock market is predicted to keep on falling.
(1)http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/15/bcnlehman815.xml

Lehman Brothers was another bank that dealt with sub-prime mortgages, repackaging them and selling them on. But, no one wishes to buy such high risk assets now, and so the bank failed as people failed to keep up with the repayments, as should have been expected.
Due to investors reluctance to invest in the property market, especially after the down fall of Lehman Brothers banks will be very unwilling to give mortgages. If they do give mortgages, there will be a high interest payment attached to it. According to the bank of England there are 70% fewer mortgages, it is virtually impossible for first time buyers, and re-mortgages are very expensive.

As banks are reluctant to throw their money around in the form of loans, mortgages or even credit cards, they become more aggressive in collecting such debt. There will be less leeway for late payments. Banks will be reluctant to help those who make late payments as they will fear that the borrower will default on payment altogether.
In addition to this, interest rates will go up on any existing debts. This will not only increase the overall amount a person will have to pay back, but also their monthly repayments. For some people, this additional money will be hard to find every month.