Inflation has now been above the Government’s 2% target – and eating away at savers’ returns – for 42 successive months.

The Funding for Lending Scheme, designed to boost lending to the real economy, has depressed savings rates and it is now near impossible for cash savers to earn a real rate of return.

According to MoneySupermarket.com, with inflation at 2.70% a basic rate tax payer would need a rate of 3.39% to beat inflation. A higher rate tax payer would need a rate of 4.51% and a 50% tax payer would need a rate of 5.41%.

Unfortunately, very few accounts offer suitable rates; currently no easy access account and no fixed rate ISA will beat inflation.

“These are horrendous times for savers, even though Britons, worried about the future, are saving more than they have done for some time,” says Simon Rose of Save Our Savers.

However, all is not lost. There are still a few options out there.

Agri Bank, the specialist lender which issues loans solely to British farmers and agribusinesses, has two fixed rate bonds offering inflation-beating rates; Agri Bank 5 year 3.60% and Agri Bank 4 year 3.50%.

However, there’s a catch. These deposits are not covered by the Financial Services Compensation Scheme (FSCS), which protects savings of up to £85,000 per institution if it goes bust, something savers need to be aware of before handing over any money.

There are some other options, but only if savers are prepared to tie their money up for five years, says Anna Bowes of Savings Champion. First Save has a 5 year Fixed Rate Bond paying 2.90% gross/AER and ICICI, Union Bank UK and Shawbrook Bank are all offering 2.75% gross/AER, fixed for 5 years.

For taxpayers, the First Direct Cash ISA pays 3% but you need at least £40,000 and a First Direct 1st Current Account to qualify.

At such a difficult time for savers, it’s crucial that they don’t rest on their laurels and leave their cash in deadbeat or post-bonus accounts where the rate paid is negligible.

Kevin Mountford, head of banking at MoneySupermarket, says: “Savers can still minimise the impact of inflation on their savings pot by making sure they switch to accounts which pay the best rates, and utilising their tax free allowances fully.

“Alternatively, they can look for other savings vehicles such as peer-to-peer, structured products or offsetting savings against your mortgage, but you should only consider doing this after understanding the risks involved.”

Jason Hollands of Bestinvest says people with a reasonable time horizon should look further up the risk/reward spectrum to try and retain the real value of their wealth.

“Despite the negative real returns on offer from cash deposits, less than 15% of ISAs are estimated to be invested in Stocks & Shares with cash ISAs being the number one choice. While it makes sense to hold cash for short to medium term savings, cash isn’t King over long-term time horizons,” he says.

However, this is not to say savers should throw all caution to the wind, he adds.

“In recent weeks markets have begun to adjust to the eventuality that quantitative easing may taper down at some point and reflect fears of a potential deceleration in the China growth story. This has pushed valuations down, particularly in those markets that were looking overbought.

“The sensible approach for cash laden savers is to tread carefully and progressively reallocate some longer-term cash positions into stocks and bonds over a period of months through a regular investment programme.”

Click here for a list of inflation beating accounts.