Business

Savers 'devastated' in August as rates fall below 0.5%

Norwich and Peterborough BS Image copyright Getty Images
Image caption Norwich and Peterborough BS is among the providers who have cut rates sharply

Millions of savers have been left "devastated" by further cuts in interest rates during August, according to analysis from Moneyfacts.

The average easy access rate fell below 0.5% for the first time, while cash Isa rates fell below 1%.

It follows the Bank of England's decision to cut base rates by 0.25% on 4 August, with the expectation of further cuts if necessary.

As a result, savings rates were reduced on 354 products during the month.

Furthermore, 53 of those cuts were greater than 0.25%, Moneyfacts said.

'Onslaught'

"The base rate now sits at its lowest level in over 300 years and has just given providers another excuse to slash rates," said Rachel Springall, finance expert at Moneyfacts.

It's clear to see that savers have been left devastated by persistent rate cuts across the market and will struggle to find decent returns for their cash in the immediate future."

She warned there could be further cuts to come, especially if the Bank of England reduced the base rate again.

Among the products with cuts of more than 0.25% were: The Halifax Help to Buy Isa, Norwich and Peterborough's Instant Isa and the Yorkshire Building Society's Triple Access Saver.

Average rates are listed below.

How savings rates fell in August
Product Average Rate at 1 August Rate at 31 August
Easy Access 0.54% 0.49%
Cash Isa 1.13% 0.99%
One-year fixed bond 1.14% 1.02%
Five-year fixed bond 1.98% 1.69%
source: Moneyfacts

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