Newcastle Building Society is reducing rates on 40 of its variable rate savings accounts. The reductions of up to 0.25 percentage points have been revealed by .

They include the double access (issue 4), which will drop from 4.05% to 3.80%, while the Newcastle (issue 3) will fall from 2.70% to 2.45%. The single access ISA (Issue 2) will drop from paying 2.4% to 2.15%. The Newcastle junior cash ISA rate will be cut from 3.75% to 3.50% and the regular saver plus from 2.50% to 2.25%

The new rates will come into effect from June 5, but do not affect fixed-rate savings accounts, and two newer accounts, the loyalty saver (issue 1) and quadruple access saver/ISA (issue 1).

Derek Sprawling, managing director of Spring savings, said last week's shock rise in inflation should prompt savers to shop around for an account paying a higher rate of interest.

He said: "The increase in the rate of inflation further erodes the value of savings earning a poor rate of interest. With over a half a trillion pounds sitting generating nothing or 1.5% or less, savers need to act and make their money work harder to maintain its value.

"Of course, everybody will have their own inflation rate based on individual circumstances and that is likely to be more than the official figure given the upwards cost pressure on housing, utilities, food and general living. The good news is that there are still options for people to generate a return above the rate of inflation and I would urge people to not accept a poor return on their cash."

Standard Life's analysis shows that inflation, even at moderate levels, can significantly erode the value of cash savings over time - especially as interest rates begin to fall.

Currently, the average interest rate on easy access savings accounts sits at around 2.46%.

At 2.46%, a £10,000 savings pot would be worth just £9,878 in real terms after two years of 3% inflation - a £122 loss in purchasing power. Savers who shop around and secure a higher rate of 4% would keep more of their money but still lose £32 in real terms.

Dean Butler, managing director for retail at Standard Life, said: "This new environment means people will need to think carefully about how and where they save. Regardless of the economic environment, it's important to have a level of easy access 'rainy day' cash savings for an emergency. However, if this is covered and you are prepared to accept some risk, investing can provide better returns and offer a chance to beat higher inflation - but remember the value of investments can go down as well as up.

"It's also worth making sure your savings and investments are as tax efficient as possible - stocks and shares ISA's can be an option, and if you're able to take a long-term view, pensions offer tax relief as well as the opportunity to build up compound investment growth over the years."