New research has revealed that one-third of UK savings accounts offer an interest rate of 0.5% or below.

The return is equivalent to 12p a month or £1.41 over a year, on an average savings balance of £2,813. Base rate decreases represent a double edged sword for consumers.

While mortgage borrowers on tracker rates have benefited from recent aggressive cuts in the base rate, savers have been penalised.

No improvement is expected in the early part of this year because the Bank of England is likely to cut the base rate again, in efforts to support the UK’s failing economy.

Attractive savings rates are still available, with 3.6% offered on Alliance & Leicester’s eSaver account and 3.55% available at online bank, ICICI Hisave.

Meanwhile, the recession would appear to have frightened Britons into saving more.

Latest figures from the British Bankers’ Association show a £4 billion rise in savings deposits, in December.

However, inflation currently stands at 3.1% meaning that rates on many savings accounts are insufficient to maintain the value of the cash they contain.

Despite the rush to save, Britons seem to be well aware of this because the Association of British Insurers’ recent Savings and Protection survey found that 73% of respondents agreed the benefits of saving have diminished over the past 12 months.