People simply cannot make the money that they need by putting their nest eggs into a savings account in this low rate and high inflation environment.

Even though inflation recently fell to 3%, it is still high, and combined with a low interest rate it means savings accounts are just not good enough. But offset mortgages are still performing well – they are flexible loans so it is you, not the UK economy, that decides how much you can save with them each month.

According to moneysupermarket.com, basic rate tax payers with savings only will now need an account paying at least 3.76% to gain benefit in real terms from their cash, increasing to 5.01% for higher rate tax payers and 6.01% for those higher rate tax payers paying 50% tax from April 6.

If you take a look at the best buy table for savings accounts these rates are nigh on impossible to find. So people are simply not going to make any money from their savings by going down the traditional paths. Kevin Mountford, head of banking at moneysupermarket.com, says: “Despite a fall in inflation, savers are still hard pressed to generate any real returns. There is a danger that many will do nothing because of the belief that there is little point, but this is not the time to be apathetic.”

It certainly isn’t the time to be apathetic. People need to get proactive and find real ways to make their money work for them. One of them is an offset mortgage. Because the savings come through increasing your offset savings pot, it is down to you how much you reduce your outgoings by each month.

So take matters into your own hands and talk to an offset mortgage adviser about quitting the moribund savings market and opting for a financial product that is really helping people now.

SOURCE: Moneysupermarket.com, 23/03/10

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