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Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, said: "Keeping interest rates on hold at 4% is better news for savers as it means average savings rates may remain higher for longer.

"Savings rates have been easing downwards in recent months, and with inflation creeping upwards, real, pre-tax returns are very much on the decline. That should not be a cause for apathy, however."

She added: "Anyone with money idling in an old savings account paying a dismal rate should still shop around to secure the best deals while interest rates remain on the higher side."

However, she urged people to consider post-tax net returns, especially as fiscal drag pulls more of people's income into higher income tax bands.

She said: "Storing too much in a regular bank or building society account puts the saver at risk of breaching their Personal Savings Allowance, a threshold unchanged since its introduction in 2016."

Basic rate taxpayers can earn £1,000 of interest tax-free, while higher rate taxpayers are limited to just £500. Additional rate taxpayers get zero allowance.

Ms Haine said: "For higher-rate taxpayers, real returns net of tax may only be marginally positive even on the most competitive accounts. A tax-efficient savings strategy can help to mitigate this."

Up to £20,000 can be contributed to an ISA (Individual Savings Account) this financial year, free of tax on income or capital gains.

Ms Haine said this is "a route an increasing number of savers are taking as more of their savings get gobbled up by tax."

She added: "The Government's latest savings statistics showed a 67% jump in Cash ISA subscriptions, while contributions to Stocks and Shares ISAs surged by almost 11%. This is a direct consequence of the high interest rate environment of the time and the resulting high saving rates, which raised the prominence of Cash ISAs as an effective way to reduce tax liabilities."

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