The turn of the new tax year provides a great opportunity for intermediaries to really extol the virtues of a product that remains one of the most tax-efficient in the financial marketplace, the offset mortgage.
Before going on though let me clarify that similar to the well-known phrase ‘a dog is for life, not just for Christmas’, offset is not just a product to dust off and wheel out around this time of year.
It is a product that works all of the time but as when selling most things , it’s often easier when you have a ‘hook’ and with thoughts being cast to a variety of tax changes, it is certainly a great time to the offset conversation with clients.
What remains one of the main selling points in regards to the offset facility is its tax-saving ability. With the Treasury recently admitting that changes in personal allowances and trigger points for the 40% tax rate “are expected to create around 400,000 more higher rate taxpayers by 2015-16” this will inevitably place greater emphasis on ‘middle earners’ being dragged into higher tax brackets.
Inevitably this will place greater emphasis on how to best manage this increased tax burden now and in the future. However, combating tax (obviously in a legal manner) is not just restricted to these middle earners.
The offset facility can not only benefit the historic advocates of offset i.e. contractors, small business owners and the growing legion of self-employed people but many employed first-time buyers, remortgagers and home movers can also benefit.
Despite some obvious benefits, offset is a product that sadly remains somewhat under-utilised but with taxation and other financial factors fresh in the mind of a variety of clients the timing is certainly right for intermediaries to bring this product to the fore to allow its true benefits to really shine.
David Finlay is intermediary managing director at Barclays
