Expat rates: why do the savings rates keep on falling? Just six months ago, it was easy to get more than 4pc for a five-year fixed rate. Indeed, Lloyds TSB International was paying 4.5pc in June on just £10,000 invested. In money terms, someone putting in £20,000 over five years at a fixed rate of 4.5pc would have about £25,036 when the account matures. At 2.83pc, they'd have £23,036 - a massive £2,000 less. In comparison, you can get 2.1pc on a variable-rate easy-access deposit account from Nationwide or 2.4pc if you give 95 days" notice of withdrawals. That's far less of a commitment than opting for a five-year fixed rate. It's not only five-year fixed rates that have been cut in the past few days. Nationwide has chopped rates on its six-month, one-year and three-year fixed rates by up to 0.45 of a percentage point. Savers wanting a six-month fixed rate will now get 1.31-1.81pc depending on the balance. The previous rate was 1.66-2.12pc. For anyone committing their money for a year, Nationwide now pays 1.4-1.9pc depending on the size of deposit. It was paying 1.7-2.35pc previously. And for three years, Nationwide is now paying 1.5-2pc: the previous rates were 1.8-2.45pc. Alliance & Leicester has cut its two-year fixed rate from 2.65pc to 2.5pc. Despite the cuts, both the Nationwide and Alliance & Leicester deals are among the best on the market. But at those rates you'd be better off on an easy-access variable-rate deal - unless these rates too take a substantial chop. But given that there has been no change in base rate for nearly four years - it fell to 0.5pc in March 2009 - it is reasonable to wonder why fixed and variable rates have taken such a tumble over the past few weeks. Money markets haven't moved far from their predictions that base rate will carry on at a low level for several years, so what is moving rates down now? According to Jim Coupe, managing director of Skipton International, the blame for falling rates falls squarely at the feet of the UK government and, in particular, a scheme set up to help would-be homeowners in the UK get good mortgage deals. He said: "Savers" rates are being adversely affected by the UK Funding for Lending Scheme, as the law of unintended consequences has taken effect. "The UK government scheme, designed to give UK banks access to cheaper funding to encourage lending to home owners and small businesses, has meant that competition for savers" funds has consequentially declined. This is reflected in the lower interest rates currently on offer compared to, for example, in August of this year when savers could earn up to 3.50pc on a 12 month deposit. And he added: "Six of the larger banks and building societies have already drawn down around £4.4bn of the government scheme's total of approximately £60bn of funding available, according to the Bank of England. Lending in the UK economy has grown by less than £0.5bn, according to the same source, suggesting that lending has some way to catch up with the available funding. He concludes: "As such, it is probable that retail savings rates will remain subdued for some time." Even though the Funding for Lending scheme is aimed only at UK homebuyers, most of the offshore banks are part of UK banking or building society groups so the repercussions are being felt in the pockets of expat savers around the world.