CPI falls to 1.5pc

To beat inflation a basic rate taxpayer at 20% would need to use a savings account paying more than 1.88% per annum, while a higher rate taxpayer at 40% would require an account paying 2.50%.

Out of the non-ISA accounts on the market there are 72 from 619 which negate the effect of tax and inflation, while 115 out of 215 ISAs offer rates to better inflation.

Sylvia Waycot, editor at Moneyfacts.co.uk, said: “The Bank of England underperformed its 2% target for inflation this month, which should make it easier to find savings accounts that outperform CPI and the taxman.

“Of course, it will come as no surprise that even with the low inflation rate of 1.5%, finding such an account is far from easy.

“Today, the average easy access account pays 0.63% as opposed to 0.71% last year.

“Settling for a fixed bond today will give you a much lower return of interest compared to this time last year when the average two-year fixed rate bond paid 1.93%, compared to 1.73% today.

“The average interest paid across the ISA range is just 1.58% and a year ago it was 1.74%.

“The imminent arrival of the super ISA means that we will all be able to legally stash more money away from the taxman this July, but the euphoria will be short lived if the accounts pay so little the taxman hardly notices.”

Such is the effect of inflation on savings £10,000 invested just five years ago would have the spending power of £8,715 today.