Analysis of figures from the Bank of England conducted by Coventry Building Society showed that annually, the money held in savings accounts with no interest rose by 6.37 per cent in October or £16.3bn.
Households in the UK have £1.72trn in savings overall, including current accounts, easy access, fixed rate bonds and cash ISAs.
Coventry Building Society said the money held in savings accounts and collecting no interest could be used to offset mortgage payments.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said, “In periods of high inflation, where people generally have less disposable income to fall back on, there could be more people who want to keep their savings accessible. At the same time, it’s important for their money to work harder for them – an offset mortgage could be an ideal solution.
“There may be borrowers who, for example, aren’t sure if they should reduce their mortgage balance to help combat interest rate rises or keep their money in accessible savings, just in case. An offset mortgage gives borrowers an option to essentially do both – they can use their savings to reduce the amount of interest charged on their mortgage, while still able to access their money if they need it.”
Stinton said it was worth looking at an offset calculator to see if this was suitable as well as to determine how much money could be saved or how quickly the mortgage could be paid off.
He added: “Giving this insight really drives home the value of advice; clients get to see that brokers are the ones who can educate them on products and solutions which might otherwise be unknown to them.”
