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Pramit Ghose, lead manager of the Elite Bloxham Global Equity Income fund, said a reduction in savings rates could encourage investors to look at income-paying funds offering attractive dividend growth.

He said some forecasts had suggested inflation rates were on their way to the Bank of England’s 2 per cent target and could even drop below 1 per cent.

“That will further support the case for an ultra-low base rate, which will be grim for those heavily dependent on income from their savings,” Mr Ghose added.

According to the manager, the Elite Bloxham Global Equity Income fund is forecast to report dividend growth of more than 4 per cent, offering investors attractive returns.

“Clearly, market conditions are more challenging now, but we have a proven investment track record and are actually quite bullish for returns in 2009,” he said.