Savers can no longer earn a real return on cash as the latest base rate cut has further restricted banks’ ability to offer interest-paying accounts.

One in seven variable-rate savings accounts now pays 0.1 per cent or less, according to Moneyfacts, the rate monitor. And the average rate on a new easy access savings account has dropped to 1.08 per cent. So, once tax and inflation have been factored in, many savers are receiving negative returns on their money. “We are now getting dangerously close to the point where people will say it’s just not worth saving,” said Kevin Mountford, head of banking at Moneysupermarket.com.

Savers who can afford to lock up their money for a year or longer can still earn up to 4 per cent but these rates could be short-lived. This week’s half-point cut by the Bank of England brings the base rate to 1 per cent, its lowest ever level. Analysts now fear that the cut will prove more harmful to savers than it is helpful to borrowers.

If negligible interest rates could discourage saving, it could in turn intensify the problems afflicting the mortgage market. Banks, which have already seen their access to the wholesale markets shut off, will have even less money to lend and may have to further limit the availability of mortgage deals. “This latest cut could make things worse,” said Andrew Montlake at Cobalt Capital, the mortgage broker. “If lenders cannot attract savers, the great thaw in lending that we are all waiting for could be further delayed.”

Banks are still reporting strong inflows into savings accounts, albeit at lower levels. But this is likely to change as savers realise how far rates have fallen.

“We are concerned about the number of consumers who are not saving at the moment, as a proportion think that now is a bad time to save,” said Charlotte Sjoberg, campaigns manager at Nationwide, which will next week call on consumers to save more.

Advisers said people who rely on income from their savings were being driven towards riskier asset classes, such as corporate bonds, structured products and equity income funds, which offer yields of up to 8 per cent.

The Institute of Financial Planning has expressed concerns that investors may enter into these complex products without fully understanding the risks they are taking.