Stock markets have been soaring, and even after two days in reverse the FTSE-100 is still up by one-third over 12 months, and close to its highs of late 1999.

Meanwhile, savers with bank and building society accounts are seeing the value of their money eroded because interest rates they are receiving are less than inflation.

Is it time for savers who are fed up with shrinking interest rates to consider a switch to shares and become novice investors?

Although consumer price inflation has now eased to 2.4%, only 14 savings accounts match or beat it, according to Savings Champion, and almost all of those require you to be an existing customer or to tie up your cash for two to five years.

Adrian Lowcock, senior investment manager at Hargreaves Lansdown, says: "Cash will always play an important role in managing your finances, but with rates so low it no longer protects investors from the ravaging effects of inflation.

"The current rate of inflation will halve the value of cash in 25 years."

By contrast, dividend payments on shares have been rising strongly ahead of inflation. However, naturally, there is more risk of losing money when investing in shares.

Investing through a fund or investment trust that holds a spread of shares helps to reduce the risk of investing in the wrong companies, although the funds can still be affected by rising and falling stock markets.

As James Budden, marketing director at investment group Baillie Gifford in Edinburgh, points out: "There is a big difference between having your savings in cash and in shares.

"Shares do give potential for real growth ahead of inflation but you have to be prepared to take the risk that they may go down in value."

However, shares can really pay off over the long term. Scottish Mortgage, one of the Baillie Gifford trusts, has increased its dividend every year for the last 31 years by more than inflation as well as growing investors' capital.

Investors with cash Isas that are no longer competitive can switch their savings to a sharesbased Isa without losing the past years' Isa allowances or affecting their current year's allowance.

Opening a shares-based Isa is often best done nowadays through a "platform" such as Alliance Trust Savings, Interactive Investor or Hargreaves Lansdown.

They will provide a "transfer in" form, which will ask you to give details of your existing account and the funds into which you wish to transfer.

The platform will then contact your previous provider to arrange the transfer.

There are a variety of options. Mr Lowcock suggests three ways for savers to beat inflation are through corporate bond funds, UK equity income funds, or global equity income funds.

He recommends funds such as Jupiter Strategic Bond, JO Hambro UK Equity Income or Newton Global Higher Income as ways of accessing these areas.

However, investors who switch from cash to a stock market investment should be aware they are taking on more risk.

Patrick Connolly of independent financial advisers Chase de Vere says: "Savers who buy into shares now risk jumping in at the peak of the market as shares have been rising for the last six-to-nine months, so a correction could be due."

He says that over five to ten years fluctuations will probably be smoothed out, but he recommends savers consider a more diversified sort of fund.

Mr Connolly says: "If you spread your investment across different asset types like shares, bonds and property you are likely to get more consistent returns."

He suggests one fund that provides a good balance is Cazenove Multi Manager Diversity, which invests one third in shares, one third in bonds and one third in other investments.

He says the key to getting the best out of these investments is to think long-term.

Savers often keep too much of their money in instant-access cash accounts, such as cash Isas, in case they need to get at it quickly, says David Thomson of VWM Wealth Management in Glasgow. It ends up lying around in these accounts when it could be making better returns elsewhere.

He says: "It is worth pointing out that if you do need to withdraw money from a fund, you can normally get it back in around a fortnight."

He suggests a well-diversified global income fund such as M&G Global Dividend or Newton Global High Income as a good long-term investment for income seekers.

Meanwhile, the FTSE-100 could be heading towards its record. Paras Anand, head of European equities at Fidelity, says: "Equities have for some time represented good value but the fear of associated volatility has generally kept investors away.

"Recent gains I believe are an indication that this mindset is changing – if this is correct, then what we have seen to date has a lot further to go."