Analysis published by Moneyfacts this week revealed that anyone with cash maturing in a five-year bond this month will only get around half as much interest if they reinvest it in a similar product.
But even the rates on one-year bonds have plunged 40 per cent in the last 12 months. The slide began with the launch of Funding for Lending, which gave lenders cheap money to lend to homeowners and small businesses.
The move has proved brilliant for borrowers but disastrous for savers as banks now have no need to offer decent rates. A year ago when Funding for Lending was launched, average, one-year bond rates paid 2.64 per cent – now they've fallen to a desultory 1.59 per cent.
With there being further aid for borrowers from Monday after the extension of the Help to Buy scheme to existing homeowners, savers have every right to feel a little angry at the Government's complete disregard for our shrinking nest eggs.