The best cash Isa rate available, from United Trust Bank, pays just 1.95pc and requires savers to lock up their cash for seven years.

Rosie Hooper of wealth manager Quilter said: “Cash Isa savers will be getting less and less bang for their buck in the months and years ahead. The time may have come for people to consider alternatives. 

“If you won’t be needing the money in the next few years, investing has a better chance of delivering an above-inflation level of return.”

Cash Isa savers have suffered the worst tax year on record with returns over the last 12 months averaging just 0.63pc.

Despite this, savers deposited more money into cash Isas than ever before this tax year. Balances peaked in May last year at £302bn and ended the year slightly below this record at £297bn.

The Bank Rate was raised from 0.5pc to 0.75pc last week, but leading bankers warned they were unlikely to pass the full rate rise onto savers.