According to figures from the Bank of England, the average return on an instant access savings account is now just 0.51 per cent, but interest rates on current accounts can be as high as six per cent.

Savers who keep their cash in an Alliance and Leicester current account could earn six per cent on balances up to £2,500, compared to 3.1 per cent in its savings account. While those who choose an Abbey current account will see returns of 5.5 per cent on the same balance, compared to just three per cent on its savings account.

The research into savings habits, conducted by Opinium Research, found that 56 per cent of the population sees this as the worst time ever for savers as interest rates fall to record lows.

The study also found that as the credit crunch takes hold, 36 per cent of people are not saving at all. Of those not saving, the research found that paying debts has become a priority for 47 per cent, who said they would start saving again after clearing their debts.

One in ten of those who have stopped saving said they will wait for the economy to recover before saving again.

Commenting on the research, director of savings at the Post Office, Richard Norman said; “Savers need to take extra care of their money by choosing a home for it wisely.

“There are hundreds of poor paying accounts, so people need to make sure they avoid them. Worryingly, only 23 per cent of those surveyed say that they have been proactive in looking for a good savings deal,” he added.

“Given savings rates have fallen sharply recently we recommend savers check what rates of interest they are currently earning on their money against those available on the market and switch to a better deal if appropriate.”

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