Moneyfacts.co.uk research has uncovered the devastating effect the Government's Funding for Lending Scheme has had on the savings market one year on from its launch.
Whilst the scheme may have increased lending to consumers and small and medium-sized businesses, Sylvia Waycot, Editor of Moneyfacts.co.uk, claims it has spectacularly backfired for savers, due to lenders no longer needing savings to lend out for mortgages as they traditionally have.
"It's an absolutely awful time for savers at the moment," Ms Waycot said during an appearance on BBC Breakfast.
For example, if you had put away £10,000 in an easy access account in August 2012, you could have expected a return of almost £110 a year. Investing that money today into the same type of account would earn you less than £70 a year.
Ms Waycot suggests that savers should look at investing in a regular savings account, as these are currently paying attractive rates from just £1.
She also warned that savers should be weary of investing in stocks and shares, as they run the risk of losing money.
"Some people will feel comfortable investing in stocks and shares, but saving into a bank or building society account means your money is not at risk."
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