Irish savers’ earning power has been slashed in recent years as the main Irish banks have cut interest rates and the Government has increased the level of deposit interest retention tax (Dirt) to 41%.

Consequently, the savings landscape has changed dramatically in just 18 months, according to consumer affairs expert Simon Moynihan.

“Eighteen months ago, the Irish banks were seriously promoting their savings products.

“Now, they almost seem to be an afterthought… Certainly, interest rates are falling across all institutions and it’s not a good time to be a saver,” said Mr Moynihan.

In January 2013, AIB’s online seven-day notice account was paying 2.5% for balances up to €10,000. Now the bank is paying 1.3% on the same account — a fall of 48%.

The loss to the saver is even greater when Dirt increases of 8% (bringing the total to 41%) are factored in, however, reducing savers’ earning power to just 46% of what it was 18 months ago.

All of which means that a saver can expect just €76.70 interest on €10,000 this year, as opposed to €167.50, 18 months ago.

Similarly, customers with their money in AIB, Bank of Ireland or Permanent TSB (PTSB) one-year fixed-term accounts, will have seen decreases of between 28% and 40% on the level of interest their bank is paying them.

The reduction in interest rates on bank deposits comes as the European Central Bank (ECB) slashed its rates from a high of 4.25% in 2008 to 0.75% in January 2013, and further to 0.15% following the latest decrease last month.

ECB president, Mario Draghi has vowed to keep rates low until the end of 2016 at least — meaning savers will have to endure a poor savings environment for some time to come.

Head of retail deposits at PTSB, Eddie Kearney said that the reduction in interest rates showed that the market was returning to more normalised, sustainable funding rates, but added that that level may not yet have been reached.

While insisting that the bank offers customers a number of attractive savings options, he also warned that “we have to be realistic; the ECB rate is 15 basis points (0.15%).”

For those struggling to put money away, Mr Moynihan identifies Nationwide UK’s regular saver account as the best in the market. But he added that you’ll need to save at least €25 per week to make it worth your while.

For details of deposit rates offered by Tag: peterodwyerBB_URL_AIB, Tag: peterodwyerBB_URL_Bank of Ireland and Tag: peterodwyerBB_URL_Permanent TSB click the links provided.