Cash Isa savers will lose nearly as much of their purchasing power this year as in the whole of the past decade after paltry interest rates failed to match soaring inflation.

The consumer prices index hit 5.5pc in the year to January, the highest level in three decades. Yet despite successive interest rate rises by the Bank of England, high street banks have failed to pass these increases on to savers.

As a result, the average easy-access cash Isa pays just 0.3pc, according to Moneyfacts, an analyst. A sum of £10,000 saved in this account would be worth just £9,507 in real terms after one year at the current rate of inflation – a loss of £493.

This is the equivalent of losing £41 a month and is £122 less than the overall purchasing power eaten by inflation over the whole of the past decade, when a £10,000 deposit would have lost £615.

Those who took a chance on the stock market instead would have seen significantly better returns over this period.
A saver using their entire cash Isa allowance would have saved £142,220 over the past 10 years, but would have just £132,663 to show for it today, according to AJ Bell, a stockbroker.

If the same saver had chosen to invest their cash in the average global stocks and shares Isa instead, the same sum would be worth £228,564 today – a return of 61pc.

AJ Bell’s Laith Khalaf said: “Stocks and shares Isa investors have been big winners from the past decade. Over any 10-year period, the odds are heavily stacked in favour of a stock investor compared with a cash saver, but the loose monetary policy of the past decade has helped exacerbate that trend.”

Shopping around for the best deal will have little impact. The best cash Isa rate currently offered is from Shawbrook Bank at 0.66pc, some 0.4 percentage points higher than the market average.

Even this best-buy deal would lose £38 a month in real terms at the current rate of inflation if a customer deposited £10,000.