Savers have nothing to celebrate after the latest news on interest rates.
The Bank of England's monetary policy committee, joined for the first time by the new governor Mark Carney, decided to keep the base rate on hold at 0.5%, where it has been stuck since March 2009.
Low interest rates cause misery for savers – and high inflation only adds to their woes.
The Consumer Price Index (CPI) rose to 2.7% in May, which means that a basic-rate taxpayer must earn 3.37% to beat tax and inflation. Higher-rate taxpayers should look for a rate of at least 4.5%. But there are no taxable accounts that beat inflation for either basic or higher rate taxpayers, so they are effectively losing money on their deposits.
Susan Hannums, director at Savingschampion.co.uk, says: "Inflation continues to be the enemy of savers. You have to put money into a cash Isa in order to earn an inflation proof return. But the choice is limited as only two Isa accounts pay more than CPI."
A number of banks and building societies have also cut their savings rates in recent weeks.
Nationwide, for example, announced sweeping changes to its savings range, including cuts to its online easy access accounts and its fixed-rate bonds. The society's fixed rates have been chopped by up to 0.4% and the MySave Online Plus account has dropped out of the best-buy tables after a cut from 1.7% to 1.4%.
Nationwide owns the Cheshire, Derbyshire and Dunfermline building societies – and they have also trimmed savings rates, following the move by their parent company.
Dunfermline, for example, has cut the rates on its four fixed bonds. The four-year deal now pays 1.9%, down from 2.3%.
The government's own policy is partly to blame for the low savings rates, according to some experts.
Its Funding for Lending Scheme (FLS) gives banks access to cheap money to lend to businesses and individuals. They therefore have little incentive to offer high rates to savers.
Ms Hannums says: "The Funding for Lending Scheme has been a disaster for savers. Ever since its introduction in August last year, rates have fallen relentlessly – easy-access rates are now over 50% lower than this time last year. Fixed-rate bonds have also fallen heavily, so those with a bond maturing now will have a shock when it comes to finding a replacement."
Most of the high-street banks and building societies do not even make an appearance in the best-buy tables as a result of the savings shake up. Instead, the tables are dominated by smaller building societies and newer entrants to the market.
Andrew Hagger, a personal finance expert, says: "The savings best buys are now dominated by less well-known brands and specialist players. Many are also only available over the internet.
"Consumers who are uncomfortable dealing with their finances online or who live in an area with poor broadband coverage are therefore missing out on some of the best savings deals. However, savers should be reassured that the less familiar names do offer the same consumer protection as the big-brand banks."
The Virgin Easy Access Saver is top of the easy access accounts with interest of 1.55% on a minimum deposit of £1. Or Triodos Bank pays 1.5% including a 0.5% bonus for 12 months. Again, the minimum deposit is £1. The Post Office Online Saver also pays 1.5%, including a 0.6% bonus for 12 months and the minimum deposit is just £1.
There are more generous easy access accounts, but they are either linked to a current account or withdrawals are limited. Yorkshire building society's Triple Access Saver, for example, pays 1.65%, but you can only access your cash three days of the year.
You can earn higher interest on fixed-rate accounts, though you have to be prepared to lock your money away. The Islamic Bank of Britain pays 2.02% on an 18-month bond, or you can earn 1.99% in the Post Office's one-year Online Bond. ICICI Bank UK, a subsidiary of an Indian bank, pays 1.95% in its HiSave Fixed Rate account, or 2.3% in its two-year fix. The Post Office and Tesco Bank offer 2.1% in their two-year bonds.
Savers prepared to commit to a longer term earn more interest. First Save's five-year Fixed Rate Bond pays 2.9%. Virgin Money bucked the rate-cutting trend when it launched last month a fixed-rate bond at 2.75% for five years. The minimum deposit is just £1. ICICI also pays 2.75% on its five year fixed rate account.
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