Savings accounts with the best deals have slashed their rates in another blow to savers.
The low rate market means savers are already struggling to get a return on their investments but now a dozen best buy deals have been cut in the last week, according to moneynet.co.uk.
The worst affected deals are those on fixed rate bonds with longer term investment periods and the ISA market has seen some cuts too on some of the best rates available.
Moneynet.co.uk’s research shows the extent to which some rates have been cut. Barclays have reduced their Golden ISA rate from 3.10 per cent to 2.08 per cent. Two of Coventry Building Societies’ one year fixed rate ISAs are no longer available and Northern Rock’s regular saver, which had a rate of 5 per cent, is also no longer available.
Other building societies, including Chelsea and Derbyshire, have cut their rates by as much as 0.5 per cent.
Changes in the savings market are likely to further dismay savers who have struggled against a 0.5 per cent base rate for the past 18 months.
Andrew Hagger of Moneynet.co.uk said: “Until we see an upward movement from the 0.50% base rate there’s little chance that savers will have anything to smile about, in fact with VAT set to rise and inflation taking chunks out of any return they manage to make, it’s just more doom and gloom.
“With rates at rock bottom there’s little incentive to save, and many people are starting to wake up to the fact that the financial rewards are greater if they make overpayments on their mortgage or credit card borrowing.”
However their research suggests that savers are still increasingly opting for longer term deals in order to get the best rates.
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