Interest rates on UK savings accounts are set to drop below 1% for the first time ever.
According to moneyfacts.co.uk, which keeps track of more than 900 savings accounts, the average rate paid out fell from 4.25% at the end of 2007 to 1.07% this month.
As the Bank of England has slashed Base Rate by 0.5% again today, typical savings rates are likely to plunge again to fractions of a percentage point.
Moneyfacts spokesman Darren Cook said:
“Savers are falling over with frustration because they were the ones who took the prudent steps and now they are the ones who are being hit drastically.
“Cutting interest rates is a textbook response to a recession but people’s livelihoods and day-to-day budgets are being devastated.”
The Bank’s Monetary Policy Committee today cut the base rate by 0.5 per cent to an all-time low of one per cent.