Savings providers cut rates by up to 4% on over 150 products

For savings providers, all of their Christmas' really have come at once with three base rate decreases totalling 3% in just three months.

November and December clearly dealt the biggest gift, enabling some providers to make more than one reduction on the same savings account in the first two weeks of the month. In total, 76 providers have dropped rates by as much as 4% on over 150 products.
It is difficult to tell exactly which base rate move providers are responding to with the latest barrage of December cuts, however it is clear that many of the reductions outstrip both the November and the December decreases.

Following the 4th December base rate decrease

47 providers have already decreased rates on 100 savings products by as much as 2.22% - this is 1.22% higher than the December decrease. On average, these providers decreased rates by 1.1%. Amongst these changes, 34 providers decreased variable rate products by 1% or more and the average is 1.13%. This is despite just a 1% base rate decrease - some cuts were as high as 1.75%.

Variable rates took the biggest hit between 1st - 4th December

Variable rate products seem to have taken the biggest hit between the 1st and the 4th December. 13 providers decreased variable savings rates by more than 1.5%, an average cut of 1.74% which is 0.24% higher than the November base rate decrease. The highest cut within this group was 2.5%.

Biggest reductions this month:

Alliance and Leicester's Save and Protect regular deposit account - reduced by 4% (for new applications)

Cahoot's savings account - reduced twice this month by a total of 2.99%. Rates of up to 3.06% are still available on this account for balances between £750,000 to £1 million

Liverpool Victoria's Easy Access cash ISA - announced two reductions this month totaling 3%. These will both come into effect within the next month.

West Bromwich personal variable rates - reduced by 2.5% before the 4th December base rate decrease

Scottish BS variable rates - reduced by up to 2.05% before the 4th December base rate decrease

Chorley and District BS variable rates - reduced by 1.75%

Barclays bank cash ISA - reduced by 1.75%

AA variable rates - reduced by up to 1.75%

Just one provider, Capital One Savings, has offered a beacon of hope by increasing the rate on its fixed rate bond by up to 0.3%

Louise Bond, Personal Finance Manager at uSwitch.com, comments: "Despite the Governments best intentions to reduce the base rate and fuel the economy, unwittingly they have actually provided a smokescreen for savings providers to slash rates as often and by as much as they please. December has been a particularly bad time for savers, with what feels like the fallout of three base rate decreases. Unfortunately, these low rates are not encouraging consumers to save at a time when every penny counts. Providers should really push savers to baton down the hatches for the remainder of the recession and, if nothing else, keep an emergency fund for the tough times ahead.

"It is particularly worrying to see that providers are continuing to cut variable rate savings accounts by more than the base rate decrease. This is something that people should look out for - an account which was once a best buy deal could offer a really low rate today. For consumers that can afford to lock their money away for 12 months, a fixed rate savings account is the best option. They currently offer rates up to 6.5% AER which will weather the storm of the additional base rate cuts we have been promised next year."