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Coronavirus: Savings deals at worst rates in over a decade

2020 has been the worst year for savers since 2009, according to new analysis. Photo: Getty

The coronavirus pandemic has caused a significant impact on savers. The first six months of 2020 have been the worst in over a decade for savers due to rate cuts on variable rate deals.

Variable rate savings accounts have fallen by the largest amount seen over the first six months of any year since 2009 after the financial crash, according to new analysis by Moneyfacts.

The average rate for easy access savings accounts now stands at 0.24%, after base rates fell from 0.56% in March to 0.51% at the beginning of April.

On an easy access account, savers could be earning as little as 0.01%, such as with NatWest, says Moneyfacts.

Savers looking at fixed rates such as one-year or longer-term fixed rate ISAs or bonds will also find they have dropped significantly over the past six months, with average rates falling by the largest proportion over the first half of any year since 2009.

Average returns have fallen between 0.48% for easy access ISAs and 0.56% for longer-term fixed ISAs since the start of 2020.

Fixed rates have also plummeted on one and five-year ISAs by 0.52% and 0.56% respectively since the start of the year.

READ MORE: UK economy suffered biggest fall since 1979 as pandemic struck

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Savers will be in for a shock to find the first six months of 2020 have been the worst for rate cuts in over a decade. Indeed, all average rates have fallen between January and June this year, but the falls are the largest we have seen since 2009, after the financial crash.

“This demonstrates how much the market has been impacted by the Coronavirus pandemic and base rate cuts, and it will leave savers feeling frustrated and disappointed.” 

Springall advises savers to “act quickly to acquire the top rates on the market regardless of which type of savings account they choose, as there seems no end to the downward trend.

“Due to the uncertainties that the Coronavirus pandemic has instilled, it is more important than ever before for consumers to build up an emergency fund that they can dip in to should they run into any financial difficulties in the months to come.”