Before the cut, HSBC and First Direct, alongside M&S Bank, offered the best regular saver rates on the market at 5 per cent.

All three banks only offer the headline regular saver account to customers with a current account with the same institution.

With a regular saver account, you commit to paying in a certain amount each month. In return, the bank or building society gives you a higher interest rate than you’d get with their current account or ordinary savings account.

First Direct customers can save between £25 and £300 a month into the regular saver account – up to a total of £3,600 a year. HSBC and M&S Bank customers can both save between £25 and £250 a month – so up to an annual total of £3,000.

The 2.75 per cent rate now offered by HSBC and First Direct is fixed for a year.

M&S Bank, which is also owned by HSBC, is still offering a regular saver at 5 per cent – so savers should act quickly in case this rate is reduced too.

After 12 months, the balance and interest in a regular saver is returned to the customer as a lump sum. No withdrawals are allowed before the year is up.

Existing HSBC and First Direct customers, who already have a regular saver up and running, will continue to receive the 5 per cent AER rate until the end of their 12-month period.

Other banks offering regular saver accounts include Santander and Lloyds which both pay 2.5 per cent for a year; and the Bank of Scotland and TSB which both pay 2 per cent. All four banks require customers to hold a current account with the respective bank before they can open a regular saver.