Banks have launched a new year's raid on savers, with rates cut on 100 savings account this January.
Savers' misery increased this month, with the Government's Funding For Lending Scheme causing banks to reduce the interest rate paid on 100 different accounts.
Savers who are already struggling with historically low interest rates and rising inflation are now seeing returns plummet on many easy-access accounts.
The controversial £80bn Funding For Lending (FLS) scheme has been widely blamed for the cuts. The FLS offers banks and building societies access to cheap money to fund mortgage lending. Since its launch in the autumn, the rates paid on savings accounts have tumbled, as banks no longer need to compete to get deposits from ordinary savers to fund their lending.
New figures from the comparison website SavingsChampion.co.uk show that last month there was a significant increase in both the number of banks reducing savings rates and the size of the rate cuts.
So far this month 16 banks and building societies reduced rates on 100 savings accounts. This compares with just 10 providers squeezing rates on 24 accounts the month before. In January last year just two banks cut rates on 11 accounts.
The average savings rate was reduced by 0.4 percentage points this month, with some providers cutting rates by a whole percentage point. Last month the average reduction was just 0.34pc.
Anna Bowes, a director of Savingschampion.co.uk, said: "No one is immune from this savings rate slaughter. New and existing savers have seen their rates plummet in recent months. Things have truly gone from bad to worse and there's no clear end in sight.
"The Funding for Lending Scheme has simply been disastrous for savers. We urge the Government to recognise the knock on effect this scheme has had on savers, especially those such as pensioners who rely on the interest paid on these accounts to subsidise their retirement income."
Ros Altmann, the director-general of Saga, said government policy was punishing the nation's savers. "It has been obvious for some time that policymakers don't care about the suffering of savers," she said.
She said quantitative easing had caused annuity rates to tumble, reducing the value of many people's pensions. At the same time keeping interest rates at historically low levels while inflation was creeping upwards was damaging these same savers. The Funding for Lending scheme was causing further misery by allowing banks to further reduce rates on many savings accounts.
At the same time there are concerns that this lending scheme has done little to help get credit through to either first-time buyers or small businesses, but has simply led to cheaper mortgages for those who already have significant equity in their home.
The majority of these home owners did not previously have difficulty accessing mortgage finances, and many were already enjoying the cheapest home loan deals for years, thanks to low interest rates.
At a recent meeting of the Treasury Select Committee Andrew Bailey, the head of prudential regulation at the Financial Services Authority, told MPs that interest rates for borrowers had not come down "to the same extent" as those paid on deposits.
Sylvia Waycot of Moneyfacts.co.uk said: "Savers are being persecuted without borrowers getting the rewards."