The effects of the fifth consecutive cut in the base rate last week remain to be seen, but already the returns paid on most common types of savings accounts are lower than ever.

Many mortgage customers have benefitted from the falling rates, as tracker mortgages and standard variable rate deals have also fallen to new lows.

But savers with branch-based notice and instant access savings accounts, ISAs and bonds, are not so lucky, as they are all offering the lowest returns since records began, after seeing the base rate fall steadily from five per cent in September to just one per cent in February.

The Bank of England’s figures show that branch-based notice accounts were paying just 0.29 per cent interest on average in January, compared to 0.9 per cent in December and 3.9 per cent in January 2008.

Branch-based instant access savings accounts were earning average returns of 0.51 per cent last month compared to 0.81 per cent in December, and significantly lower that the 2.77 per cent they were earning earlier in the year.

Tax-free ISAs – usually known for their competitive rates in addition to offering protection from the taxman – have now fallen to the lowest returns since they were introduced in 1999. They are now offering average returns of 1.38 per cent, compared to the 5.06 per cent customers were seeing a year before.

Fixed rate bonds have also been hit; traditionally offering higher rates than standard savings accounts in return for savers locking their money away for a fixed period, rates on these accounts have fallen to 2.35 per cent, down from 3.06 per cent in December and earning half what they were when fixed rate bonds were at their peak in October 2007.

Consumer groups have criticised the latest base rate cut from the Bank of England, arguing that monetary policy is continuing to save hundreds of pounds a month for borrowers – half of which are on tracker, variable rate or discount mortgages – but leaving savers out in the cold.

People on fixed incomes are being hit especially hard, particularly pensioners who rely upon their savings and investments to top up their pensions.

But savers can still make the best of a bad situation if they compare savings accounts, said David Black, banking consultant at Defaqto, because “it is now very easy to keep abreast of the best deals available”.

© Fair Investment Company Ltd