50 per cent tax payers save with an offset

50 per cent tax payers are often on the look out to secure a good deal on their savings, especially when their income is being hit so hard by the taxman. According to first direct, using an offset could be a good way forward, as those in the top tax bracket could be £1,917.57 better off in just one year if they have savings of £50,000 in an offset rather than an instant access savings account. Even those paying the 20 per cent rate of tax could save £1,872.87 a year by making the switch. Richard Tolchard, senior mortgage product manager at first direct, noted that using an offset is a “fantastic option” for people who need a mortgage and also have savings. “They will benefit from a higher equivalent rate of interest with the added benefit of instant access to their savings,” he added. While using an offset might not be the most beneficial option when savings accounts are high, the current low Bank of England rate of 0.5 per cent does not look likely to show much improvement for the foreseeable future, making now the perfect time to look into alternatives.

http://www.50percenttax.co.uk/index/2012/3/7/50-per-cent-tax-payers-save-with-an-offset.html