Rising inflation and record low interest rates have created a “toxic combination” that would create a “spiral of misery” for those relying on savings to see them through, experts warned last night.
Nest-eggs hardworking Britons have spent years building for their old age will start to “shrink.”
The situation will also hit annuity rates and payments from pensions.
According to the Bank of England, the average instant-access account now pays just 0.3per cent.
This means that an account with £1,000 will rise after a year to £1,003.
But because of inflation this figure in real terms is only worth £990.
If the Bank cuts its base rate to 0.25 per cent the minute amounts of interest paid on savings will be cancelled out by growing inflation.
Experts have called on savers to shop around for the dwindling number of accounts that pay interest rates that outstrip…