Nest-eggs plundered by flock of lenders

Several leading banks and building societies this week took an axe to their savings rates, leaving millions of people's nest-eggs looking a little less well-feathered.

Halifax, Nationwide, Abbey National, Cheltenham & Gloucester and Alliance & Leicester are among the high street giants that have reduced some of their savings rates by more than last month's 0.25% Bank of England base rate cut.

Barclays deserves special mention for the hatchet job it has done on its cash Isa and Tessa account-holders. They have seen their rates slashed by up to 0.85%.

The banks will furiously deny it, but it's difficult to avoid concluding that savers are picking up the bill for the headline-grabbing mortgage rate cuts that many institutions have announced. To add insult to injury, many of them sneaked out their new savings rates with little or no fanfare, presumably in the hope that the media and the public wouldn't notice.

All the predictions are for one or more interest rate cuts this year, particularly after US Federal Reserve chairman Alan Greenspan this week hinted at further rate reductions over there, and Japan was forced to lower its interest rates. So, now is the time to check your rate and, if it has taken a kicking, move your money out sharpish.

Melanie Stewart at financial data magazine Moneyfacts, says about 50 banks and building societies have now moved their savings rates since the February base rate cut, and most have reduced them by between 0.3% and 0.5%. "If you're a saver you've got to watch very carefully where your money is, particularly if you are relying on an income," she adds.

However, there are some winners in this week's savings shake-up. The Halifax, Nationwide and Barclays are among those which raised rates for some of their savers by as much as 0.5%.

All eyes were on the Halifax to see whether its army of savers would take a hit after it cut its core mortgage rate by 0.75% just under a fortnight ago. On the whole the bank has played it fair, reducing rates on the majority of accounts in line with the 0.25 % base rate cut.

Most Bonus Gold and 60 Day Gold savers will see their rates cut by 0.25%, as will customers of the internet-operated Web Saver account, who will now receive 6.1% instead of 6.35% (if you opt for a cash card the new rate is 5.35%). The instant access Liquid Gold account rate was paying 2% but now gives you just 1.75%.

Worst-off at the Halifax are its Isa Saver customers with between £3,000 and £9,000 stashed away, who will see their rate slide from 6.4% to 6%, and Instant Saver customers with more than £5,000 invested, where the rate falls from 4.75% to 4.4%.

However, savers with less than £10,000 in its Bonus Gold account will see their rate rise from 4% to 4.4%, as will those with between £5,000 and £10,000 in the Halifax's 60 Day Gold notice account.

Nationwide building society has also been in the news over its mortgage rate cuts, so how does it fare on the savings front? Well, its new rates which take effect on Wednesday are a real mixed bag. Most rates are being cut by between 0.1% and 0.4%. The many thousands of people who have flocked to put money in Nationwide's online e-Savings account in recent months will not be pleased to hear that they are bearing the brunt of the rate cuts.

The e-Savings rate has been slashed from 6.7% to 6.3%. The account was launched with much fanfare last June, when it paid 7%. And its cash mini-Isa and Tessa rates have fallen from 6.55% to 6.2%.

But on the plus side Nationwide is raising rates on many of its established accounts. Those with between £1 and £499 in CashBuilder will now get 1.7% instead of 1.2%, while many people with CapitalBuilder, Bonus 60 and MonthlyIncome accounts will also enjoy a smaller rate rise.

This is what some of the other leading players have been up to:

Barclays has announced some of the nastiest cuts. Its cash mini-Isa and Tessa savers will see their rates cut by up to 0.85%, so someone with less than £1,000 tucked away will see their rate plummet from 5.75% to 4.9%. Barclays defended the cuts, saying they were "designed to move us back in line with our competitors". It says some savers, including many of its Tessa-only Isa customers, will see rate rises of up to 0.5%.

Abbey National is cutting rates on many of its most popular accounts by 0.4%. Its cash mini-Isa was paying 5.8% on balances of between £10 and £2,999, and now pays 5.4%, and its online eSaver account sees its rate drop from 6.85% to 6.45%

Alliance & Leicester also trimmed rates on most accounts by an average of 0.4%. And worst hit among Cheltenham & Gloucester's customers are its Direct Transfer account-holders, whose annual rate has been cut by 0.45%.