Since the start of March, the impact of the coronavirus and subsequent base rate cuts have seen average returns on savings accounts plummet.

Moneyfacts’ latest UK Savings Trends Treasury Report found that average savings rates have fallen for the fifth consecutive month.

The interest rates on easy access accounts, which remain a firm favourite with savers, have halved, from an average of  0.56% in March to just 0.22% in August.

The typical rates paid on notice accounts and their ISA equivalents, and one-year fixed ISAs have also halved since March.

Notice accounts paid an average of 1% in March but the typical rate is just 0.48% now.

The average rates paid on one-year fixed bonds, longer-term fixed bonds and longer-term fixed ISAs have reduced by at least a third in the same time period.

For example, one-year fixed bonds paid an average rate of 1.15% in March but the typical rate now stands at 0.63%.

Rachel Springall, finance expert at Moneyfacts, said: “As the UK enters a recession for the first time in 11 years, consumers may be looking to put aside some cash for an emergency fund in response. Since the UK lockdown, savings rates have plummeted to record lows across the board, so prospective savers may be disheartened with the current rates on offer.

“The impact of the coronavirus pandemic and subsequent base rate cuts has caused a rate-cutting trend among savings providers and while this is expected to slow down, there are few signs of the market making a U-turn any time soon. Choice is also limited, and despite a small rise to the number of savings account options including ISAs month-on-month, there are 366 fewer options than there were at the start of March 2020.

“Challenger banks may still attempt to entice new savers over the short-term to fund their future lending – proven in recent weeks by one-year fixed bond competition in the top rate tables – but it is unknown whether this will continue over the coming months. The average one-year fixed bond rate has fallen by more than a third since the start of March, so even if a few deals improve, there will need to be a market-wide movement to return to the rates seen pre-lockdown.”