The peer-to-peer platform said that the average interest rate on zero and low-interest bank accounts is now 0.77% – which includes allowing for a 0.25% increase in line with the recent Bank of England base rate announcement – down from an average of 0.9% two years ago.
This gives savers just £10.06bn in interest on the £1.3 trillion they have placed in bank accounts and Isas.
Around £187.1bn of savings are placed in bank accounts that generate no interest at all.
The interest these accounts accrue is dwarfed by the £36.6bn savers are losing to inflation, which currently stands at 2.8% (CPI), an increase on the inflation rate at the end of 2015, which was 0.2%.
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“The amount savers are losing is staggering, even when the impact of the recent interest rate rise is taken into account,” said Liam Brooke, co-founder of Lendy (pictured above).
“Savers may well not feel the effects of this directly, with many banks unlikely to pass the interest rate rise on in its entirety.
“Savers need a plan B to beat inflation, looking at alternative ways to retain and grow the value of their capital.
Liam felt that peer-to-peer investments were in a different league to savings – with a very different risk/return profile.
“However, even allocating just a relatively small proportion of a portfolio to such potentially high-yielding investments could act as a buffer against inflation erosion, provide all-important diversification and help drive returns.
“At Lendy, our investments into asset-backed property loans are based on low loan-to-value ratios, across a diverse portfolio of property types and locations.
“This helps minimise risk and enables investors to create a diversified portfolio within the peer-to-peer asset class.”