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More than 100 savings accounts now pay less than 0.1pc a year in interest and scores more are expected to cut their rates in the coming weeks.
The savings market has been severely hit by the coronavirus outbreak and the two cuts to the Bank of England’s interest rate that followed. In the worst cases, accounts pay 0.01pc a year.
Figures compiled by Savings Champion, an industry analyst, for Telegraph Money found that 111 accounts paid less than the Bank Rate, which stands at 0.1pc.
Further cuts are to follow: banks and building societies have announced that 42 more accounts will have their rate cut to less than 0.1pc in the coming months.
Barclays, HSBC, Lloyds, NatWest and Royal Bank of Scotland have all announced rate cuts that will see savers earn just 0.01pc in interest from some accounts.
Based on the average cash Isa balance of £5,114, it would take a saver 20 years to earn £10 from an account that paid 0.01pc interest.
Rates on more than 600 accounts have been cut since March 11 or will be reduced shortly. In some cases the drop has been much more than the 0.65 percentage point fall in the Bank Rate.
Yorkshire Building Society has cut the rate on its Help to Buy Isa by 1.25 percentage points to 1pc and Chelsea Building Society has reduced the top rate on its e-Isa Plus from 1.35pc to 0.25pc. The rate on the Britannia Select Access Saver (issue 10) will be lowered by 0.85 percentage points to 0.55pc on June 24.
Children’s accounts have also been hit hard. The Santander Junior Isa interest rate will be cut by 1.25 percentage points to 1.5pc on May 22 and the Nationwide Future Saver’s rate will drop from 2.5pc to 0.5pc on May 1.
Anna Bowes, of Savings Champion, said the two Bank Rate cuts in one month had been “brutal” for savers.
However, not all providers have pressed ahead with interest rate reductions. National Savings & Investments said last week that it had reversed planned changes to Premium Bonds and variable-rate accounts.
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