Savings rates fell across the board last month with interest on individual savings accounts and fixed-rate bonds seeing the largest cuts in 14 years.
Average interest paid on a one-year fixed rate ISA fell from 4.99% to 4.72% between December and January, comparison site Moneyfacts revealed on Monday.
Typical rates on one-year fixed-rate bonds dipped below 5% for the first time since July last year, falling from 5.13% to 4.87% between December and January.
These marked the largest respective cuts to each since early 2009, Moneyfacts added.
“The significant cuts seen across fixed-rate bond and fixed ISA rates month-on-month are the biggest recorded in almost 15 years,” Moneyfacts finance expert Rachell Springall noted.
“This will no doubt come as a shock for savers who use these accounts to earn a guaranteed return on their hard-earned cash and have waited a couple of months to invest.”
Lenders had hiked savings and mortgage rates on the back of a rise in base interest to 5.25% over the course of 2023.
Subsiding inflation has led to speculation that base interest will be cut from this level in the coming months, however, prompting a reduction in both rates.