Savings providers cut rates by up to 1.3% in August

Interest rate cuts across the market totalled 354, compared to just 3 rate rises.

However Moneyfacts data reveals that 53 providers made cuts that were greater than 0.25%, with some cuts over five times as much, including United Bank UK who cut its 7-year bond down from 2.12% to 0.82%.

This has sent average savings rates plummeting to new lows, with the majority of average rates paying half what they did five years ago.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “Savers have once again shouldered the burden of a base rate cut, but the sad fact is that rates were already at appalling lows long before the Bank of England slashed base rate to 0.25%. Consecutive years of Government lending initiatives meant that the banks lacked a desire for savers’ deposits, resulting in an obvious lack of competition in the market.

“The base rate now sits at its lowest level in over 300 years and has just given providers another excuse to slash rates. Worse still, there are savings deals being completely withdrawn from the market during August, with 20 best buy deals gone.

“Despite an onslaught of cuts being made during August, savers would be wise to brace themselves for more cuts to come, particularly to best buy deals where providers may struggle to cope with demand.

“It’s clear to see that savers have been left devastated by persistent rate cuts across the market and will struggle to find decent returns for their cash in the immediate future.”