The expected sharp drop in interest rates this year is further bad news for depositors. In the run up to European Monetary Union, Irish interest rates are expected to fall by as much as 1.5 per cent, making it more difficult to make significant interest on money deposited at the various banks and building societies.

Pensioners who may rely on an income from their deposits will be under particular pressure. Depositors should shop around to find the best rate of interest on savings, and where possible seek accounts which lock into a fixed rate of interest for a certain period.