The old adage that ‘if you look after the pennies the pounds will take care of themselves’ may not be true in the 21st century but the message is worth bearing in mind as Brits look for other ways to make their money work for them.

With instant access savings accounts now paying an average of just under 0.75% according to the latest research from moneynet.co.uk, it’s important for consumers to explore alternative savings products in an effort to get a half decent return on their cash.

There are better rates available if you’re prepared to consider putting a regular sum of cash away on a monthly basis. Whilst it may seem like too much hassle, in reality it’s pretty straightforward and a few minutes work can see you handsomely rewarded each month. One of the best vehicles to put the cash in is an offset mortgage – the more you save into the mortgage, the less you pay.

It’s easy to use as well – a good offset mortgage broker will help you link any number of instant or fixed savings accounts or ISAs into the mortgage. So you do not even need to change all your finances to be able to make the most of offset.

If you can save a little each month, maybe £100 or more, it all adds up – on top of your existing savings that extra cash will go towards reducing the rate of your mortgage. By the end of the year you will have found that a chunk of your original repayment rate will have disappeared and your outgoings will have shrunk. Of course if you keep up with the original repayments then you will overpay into your mortgage and will reduce your rate by even more.

Offset works best when it is constantly managed. That isn’t always an easy task and it needs the guidance of a professional offset mortgage adviser, but it is possible and many people in the UK can tell you that it does work.

SOURCE: Moneynet.co.uk, 23/02/10

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