Offset mortgages will benefit from a renewed interest in saving as the amount hoarded by UK savers more than doubled over the last 12 months.
 
New research from Birmingham Midshires has revealed Brits increased their savings pots and reduced their raiding in 2009 – and now, on a quarterly basis, they are saving 136% more than compared to this time last year. In the three months to January 2010, Britons saved an average of £776, compared with £329 during the three months to January 2009.

If you have an offset mortgage, investing as much as £776 over three months would significantly reduce your mortgage outgoings. So this new savings attitude can easy translate to profits if used alongside a good offset mortgage.

The research also found that although two in five British adults admit to raiding their savings during the same period, the average raiding amount has reduced to £1,724 from an all time high in July 2009 of £2,191. Almost a quarter of respondents raided their savings to pay for emergency home or car repairs whilst only a sixth used their savings to pay for a holiday.

So as well as saving more, people are raiding savings less. This trend also translates into offset profits – the less you take out of your offset, the less you have to pay at the end of the month and the shorter your mortgage term.

John Bianco, head of Birmingham Midshires savings products says: ‘It is encouraging to see that people are taking their savings seriously, putting away more and raiding less. In the current economic climate people have revisited their savings habits with a marked increase in people saving for a rainy day.”
 
SOURCE: BM, 27/01/10

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