50% taxpayers should consider mortgage offsetting

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Data from moneysupermarket.com shows that savers and borrowers who fall into the new income tax bracket of 50% would need a savings account paying at least 7.4% to beat the effects of tax and inflation.

Unfortunately, the impact of base rates at an historic low of 0.5% and the Retail Price Index of 3.7% is that there are now no UK savings accounts that will give 50% taxpayers a real return on their savings.

However, for those 50% taxpayers with savings and a mortgage, moneysupermarket.com says now could prove the perfect time to consider switching to an offset mortgage deal as a way of providing an alternative to poor paying savings accounts.

Hannah Mercedes-Skenfield, mortgage channel manager at moneysupermarket.com, said: “Many people in the new 50% tax bracket will be looking at ways to limit the impact of both tax and inflation. As a result offset mortgages are an extremely attractive option for borrowers who also have a decent savings pot.

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