Britain's biggest banks and building societies have punished Isa savers more than ordinary accountholders since interest rates started to fall, according to new research.

Millions of people have salted away nearly £160 billion in Isas over the past decade and the schemes are likely to get even more popular — the tax-free interest is one of the few ways to boost returns with interest rates at a 57-year low of only 2%.

However, the country’s 10 largest savings institutions have slashed their average Isa rates by more than the interest on their easy-access accounts since February last year, when Bank rate was cut to 5.5%, according to research from data firm Moneyfacts. The figures do not even include the latest one percentage point reduction to 2%.

Abbey has been one of the worst offenders with its Easy Isa slashed by 2.79 points even though Bank rate had been cut by only 2½ points — from 5.5% to 3% — ahead of the latest reduction. Its standard Esaver account, by contrast, is down only 2.24 percentage points.

The research comes as the government is coming under growing pressure to do more to help hard-pressed savers, having pumped billions into the banks only to watch them fail to play fair by passing on rate cuts.

Vince Cable, the Liberal Democrat Treasury spokesman, warned last week that banks were “running rings around government”. He said: “The government is becoming progressively enfeebled by the day as the banks do what they want. It’s the government’s job, since it has put in all this taxpayers’ money, to set strategic priorities for the banks to protect long-term savers.”

There are now 10 Isas paying less than Bank rate. The Smile cash Isa had a headline-grabbing rate of 7.25% in February 2000 when Bank rate was 5.75%. However, the rate is now only 1% — 1% below Bank rate. Barnsley building society, which is likely to merge with Yorkshire building society, pays 0.2% if you hold between £100 and £500.

Overall, Isa rates have been cut by an average 2.05 points, while easy-access accounts are down only 1.97 points. This will cost Isa savers about £126m a year in lost interest payments.

Things are likely to get worse as firms take the latest Bank rate cut into account.

Michelle Slade from Moneyfacts said: “The full impact of the latest cut will not be seen until next year as banks usually cut rates from the beginning of the following month. So, potentially, the average could fall by another 1%.”

Savings rates on a normal deposit account do not look good either. The average rate for a deposit of £5,000 has plummeted to its lowest level in more than four years — and that is before December’s cut. It stands at 2.3%, compared with 2.49% in April 2004.

David Black of Defaqto, the research firm, said: “With rates on cash Isas as low as 0.2% in one instance it makes sense to check that your current deal is still competitive but make sure that you don’t lose the tax-free status if you decide to transfer to a new provider.”