Interest rates have been increased on just 3.5% of variable accounts in the past six months, despite providers hoping to get savers' money to fund mortgage lending, according to research.
The freeze of the Bank of England's base rate has failed to increase the interest rates paid on savings accounts, with one in 10 actually cutting their rates during the same period, according to financial information group Moneyfacts.co.uk.
Savings providers have cut the returns paid on 4% of all variable rate accounts during the past month, dropping them by as much as 0.86%.
Almost half (49%) of all variable rate savings accounts are currently paying interest of 0.5% or less, while nearly a quarter offer interest rates of 0.1% or below.
The fall in interest rates has hit savers hard over the past year. The average rate paid on a branch-based instant access account is just 0.17%, while notice accounts offer average returns of 0.39%, according to recent Bank of England figures.
"Savers are already experiencing some of the lowest rates ever and this will be another bitter blow to take," said spokeswoman for Moneyfacts.co.uk Michelle Slade. "Savers will be asking how providers can justify cutting rates further, when the base rate has remained on hold."
New regulations came into force earlier this month requiring savings providers to give customers at least two months' notice of interest rate cuts, unless the product is a tracker account, such as one where rates move up and down in line with the base rate.
Banks and building societies also now have to write to customers to warn them when introductory bonuses are coming to an end.
Ms Slade said: "It appears that a number of providers have pre-empted these changes and reduced rates before the new rules came into force.
"Savers need to ensure they review the rate they are receiving regularly and switch accounts if it is no longer competitive.
However good deals are still available to savers if they shop around, despite the low rates on offer from some providers.
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