Record low interest rates and multibillion-pound emergency support measures from the Bank of England are losing savers nearly £18bn a year, research showed today.
High levels of inflation, which has been kept higher by the Bank's £325bn quantitative easing programme — combined with low interest rates on savings and current accounts has caused a severe decline in the value of the nation's savings.
Even traditionally higher interest savings accounts such as ISAs are below inflation, at an average of 2.6% interest per year, accountancy network UHY Hacker and Young said.
As the cost of living continues to rise, money in these types of accounts, or in any with interest rates below inflation, will decline in value monthly, the report said.
Mark Giddens, partner at UHY Hacker and Young said: “Savers are losing a staggering amount of money.”
He added the banks’ intervention to keep interest rates low feeds through to deposit rates and ensures savers are unlikely to see rates raised in the near future.