When the Bank of England slashed interest rates during the financial crisis, savings rates plummeted leaving people who rely on their savings for income struggling.
Rates for Isas, bonds and easy-access accounts have all stayed at rock-bottom levels for years.
However, there might be some light at the end of the tunnel. Many experts are predicting a rise in interest rates this year that could see savings rates nudge up.
With interest rates going up to 0.75% in August, the Bank of England has said that further rises may be on the cards.
However, much will depend on the Brexit deal secured by the government and the impact that this has on the economy.
Andrew Hagger, personal finance expert at Moneycomms, says: “We might see another base rate increase this year, maybe another quarter per cent, making it the third rise in the past three years.”
Marcus moves the market
Last year, Goldman Sachs launched its market-moving Marcus 1.5% easy-access savings account. In response, rates have risen across the board. Virgin Money has now matched it, while ICICI Bank has beaten it with a rate of 1.55%.
Mr Hagger says: “The competition in savings products certainly picked up in the latter part of 2018, and I expect that to continue this year.
“Marcus has given the other providers an impetus to up their game, so I think things are looking quite good for savers.”
However, these accounts do come with a catch. Virgin limits you to two withdrawals a year, while the Marcus rate includes a 0.15% bonus for the first year you hold the account. The ICICI rate has a 0.30% bonus for the first 12 months.
“Savings in a high street bank could earn you next to nothing”
Don’t dismiss unfamiliar products
Fixed-rate bonds also rose over the past year, going up on average from 1.31% to 1.51%.
The current top one-year deal is from Gatehouse Bank at 2.15%, better than best rate on offer this time last year, which was 1.85% from Al-Rayan Bank. Both offer an ‘expected profit rate’ (EPR) instead of traditional interest.
Mr Hagger says: “Consumers should not discount a provider just because they are not familiar with the name.
“A lot of smaller, less well-known brands are offering the better rates rather than the high street banks and most of them are back by the Financial Services Compensation Scheme, so your money is safe up to £85,000.”
It was also a good year for Isas. Average rates for fixed rate Isas went up from 1.16% to 1.42%, while the average for variable rate Isas went up from 0.70% to 0.86%.
Protect your savings from uncertainty
Anna Bowes, co-founder of savings advice site Savings Champion, says that it is impossible to predict what impact Brexit might have on savings rates.
She suggests savers looking to shelter themselves against a downturn should consider putting money into a fixed-rate bond to ensure a guaranteed return, instead of sitting in a low-paying, high street savings account. Ms Bowes says: “The good news is that fixed rates are at a higher level than they have been for some time.
“If your money is languishing in a high street bank, it could earn next to nothing unless you move it somewhere else.”
Marcus by Goldman Sachs
Marcus offers an easy-access savings account with an interest rate of 1.5% for the first 12 months.
However, this includes a 0.15% bonus for the first 12 months, meaning that after a year the saving rate will drop to 1.35%. Savers can withdraw their money as many times as they like, with no fees or charges.