Savers advised to ‘review accounts’ as latest data finds interest rates have fallen to ‘record lows’

The average easy access saver interest rate fell to 0.19% this month, according to new research from financial data company Moneyfacts UK.

The firm’s latest savings trends Treasury Report, which previewed data on Monday, found that rates had plunged below a third of the 0.60% observed by the report's researchers this time last year.

The report found that overall, average savings rates are now at their lowest point since Moneyfacts’ electronic records began in 2007.

It comes as many households across the UK save more than they have in years, stashing away cash saved by staying at home during the pandemic.

According to recent Bank of England data, savers had deposited more than £75 billion into cash accounts between March and the end of October.

Moneyfacts finance expert, Rachel Springall, called the cuts in rates offered in recent months - as demand soared - “unprecedented”.

It comes after several attractive-rate savings accounts, such as the easy-access Marcus by Goldman Sachs, stopped taking new customers since the start of the pandemic.

She said: "Clearly it has been a tough year for savers, and they will be approaching the end of 2020 with rates falling to record lows.

"The coronavirus pandemic and subsequent Bank of England base rate cuts have left an unprecedented impact on the savings market and uncertainty remains.

"Savings providers have had to react to an extremely volatile market this year and this has meant deals have been cut multiple times in a short space of time in some cases or withdrawn from the market entirely.

"In recent weeks, the easy access market has changed considerably as savers continue to flood this arena thanks to the flexibility the accounts provide, and the recent rate cuts made by National Savings and Investments NS&I."

The report found that the average one-year fixed rate bond pays under half the rate seen in December 2019.

It also found the range of savings products on offer for consumers has also reduced since the November Moneyfacts report.