Child savings accounts slash interest rates

More than 100 rate cuts have been made to child savings accounts during 2016, according to a website.

Some deals are now paying children as little as 0.1% in annual interest according to Moneyfacts.co.uk - with the paltry returns available meaning some young savers are not much better off than if they had left their cash stashed in their piggy bank.

Moneyfacts said the average rate on offer for child savers had fallen from 1.54% in October 2014 to 1.39% by October 2016.

So far, 115 individual rate cuts have been made to child savings accounts this year.

Moneyfacts said the recent cut in the Bank of England base rate, to 0.25% had helped to send children's savings rates tumbling further.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said if a good deal turns bad it is wise to consider switching elsewhere.

She said : "For example, for Junior Isas, Coventry Building Society currently offers a 'best buy' deal paying 3.25% and accepts transfers in - just keep in mind that this is a variable rate so it could change over time."