Is your money sitting in one of Britain’s worst cash Isas?

TODAY, Money Mail lays bare the misery heaped on savers by Britain’s biggest banks and building societies.

Our annual Isa survey found one in four cash Isas at the major providers now pays less than 0.25 pc.

This means that savers are getting less than the official interest rate that banks earn on their own deposits at the Bank of England.

In the worst cases, savers were paid as little as 0.1 pc in 2016 — or just £1 interest on £1,000 for the whole of the year.

And following a raft of rate cuts, providers are now set to pay just 10p interest for every £1,000 over the next 12 months.

Our study, which looked at more than 90 variable-rate Isas, revealed the big banks as the villains.

The table (right) lays bare what you would have earned last year, taking into account all the rate cuts you would have experienced over that period.

Santander got away with paying just £1 interest per £1,000, while Halifax, Lloyds, Bank of Scotland, NatWest and TSB dished out just £2.

By contrast, most of the best Isa accounts last year were offered by building societies. For example, savers in Coventry BS Privilege Isa saw a better £20 interest on £1,000.

Leeds, Skipton and Yorkshire building societies and Virgin Money all paid between £13 and £16 interest on £1,000. All these deals are closed to new savers. The top rates, however, pale in comparison to those offered in previous years.

Banks have been slashing rates since the Bank of England cut the base rate in August to an historic low of 0.25pc. They don’t need savers’ money, as they can borrow from the Bank of England at rockbottom rates of 0.25pc under its Term Funding Scheme.

There is now £271 billion in cash Isas, up £7billion on a year ago. Yet providers still pay less interest overall.

In 2015, they dished out £3.7 billion at an average rate of 1.4 pc. Now the average is 1 pc, it’s £2.7 billion — or a billion less.

In 2010, the first full year that the base rate stood at 0.5pc, our cash Isa survey revealed the best account was NatWest’s Cash E-Isa, which paid £301 on £10,000. Its rate at the end of that year was 2.75 pc.

But last year, savers in that account earned just £21 on their £10,000 — or £280 less.

NatWest’s E-Isa rate was consistently among the top payers for years. But in January 2014, it moved these savers into its Cash Isa. Then in November, it cut that rate to as little as 0.01 pc.

That means your £1,000 will earn just 10p this year, while £10,000 will see only £1 interest.

With £25,000 in your account — where the bank pays 0.05 pc — your interest will tumble from £52 to £12.50.

Santander Direct Isa at £300 interest on £10,000 and Lloyds TSB Cash Isa Saver at £200 were also among the winners in 2010.

But last year, Santander paid £75 and Lloyds £24.

If you stick with Santander — which cut its Isa Saver rate in November to 0.1 pc on balances up to £10,000 and 0.5pc on sums of £10,000 and above, you can get no more than £50 on your £10,000 or £1 on £1,000.

You end up in the Isa Saver account — closed to new savers — once you have been in its Direct Isa or E-Isa for a year.

Halifax and Lloyds play the same trick. With Halifax, you end up in its Instant Isa Saver after 12 months. It pays 0.05 pc — or 50p on £1,000.

Lloyds moves you into its Instant Cash Saver also paying 0.05pc. HSBC customers are similarly in for a shock if they stay put.

Its E-Isa rate falls to 0.2pc this month, giving just £20 on £10,000, down from £87 last year. A year ago, the account paid 1 pc, but savers have suffered a 0.8 percentage point fall against a 0.25 point fall in the base rate.

The HSBC Loyalty Cash Isa, which paid 1.3pc in January 2016, was cut to 0.9 pc in September and is now falling to 0.5pc — which equates to £50 interest on £10,000, down from £120 last year.

By switching to a better deal, you can raise your rate to 0.51 pc on average, and nearer 1 pc with the top deals.

This will raise your interest on each £10,000 from £1 in the worst account to nearer £100.

To switch, check that your chosen provider accepts transfers into the account — not all do.

Fill in its transfer form and ask it to organise the move for you.

Top deals for transfers on easy-access accounts include 0.95 pc from Virgin Money Defined Access Isa — although you are limited to making three withdrawals a year.

Your new provider must start paying you the higher rate after 15 days — even if the transfer is delayed.

Two-thirds of switches do happen, however, within seven days.