More than two thirds of instant access savings accounts do not pay enough interest to counteract the impact of inflation, new figures reveal.
Savers have started to see their savings being affected by inflation
Working Lunch commissioned the exclusive calculations from financial information service Moneyfacts.
Looking at one measure of inflation, the Retail Prices Index (RPI), more than 69% of no-notice savings accounts pay insufficient interest to counteract the shrinkage caused by inflation.
The RPI, which is currently at 4.8%, is the traditional measure used in setting pensions and in wage negotiations.
In March the governor of the Bank of England was forced to write a letter to the Chancellor explaining why inflation was more than one percentage point above the government's target of 2%.
The bank admitted that prices have been rising too fast, and savers are starting to see the affect on their savings.
Inflation results in the value of bank deposits shrinking because the buying power of the money diminishes.
Many savers console themselves that the damage is repaired when interest is paid, except our figures have revealed that it is simply not enough in most cases.
Banks and building societies have been following the Bank of England in recent months in putting interest rates up, however ING Direct has decided to cut them on their Web Saver account.
Working Lunch viewers have been complaining about this decision by the bank, which did have a record of paying high rates.
"I received an e-mail from ING Direct stating that they are reducing the interest on their Web Saver account from 5.65% to 5.5%. Can you ask them why, when the rest of the banks and building societies are raising their rates," viewer Ian Ironmonger asked the programme.
ING says its Web Saver rate is 'one of the top savings rates in the UK'
Another viewer, Graham Anderson, says he is 'disappointed' at ING's decision.
He transferred the balance from a savings account into a Web Saver account because of its attractive rate, only then to see it cut.
ING has reiterated its commitment to customers.
"We are committed to offering our customers a range of competitively priced savings accounts that meet their different needs. Our Web Saver pays 5.5%, still making it one of the top savings rates in the UK," the bank told Working Lunch.