Offset Mortgage & SIPP's

holly_hobby

Thrugelmir wrote: »

ISA has limited annual contribution. So might as well use standard mortgage offset product. Few lenders offer an ISA offset as a product.

Of course it has annual limits thats a given - and noted in my post to the OP, it also gives tax advantages and you may retain it long after the mge concludes. (subject to goverment changes or termination of the product as was evidenced with TESSAs)

Downsides, you are restricted to having a mge with a lender that permits ISA offset - (IF (existing borrowers), Woolwich/Barclays, although there may be others, and current rates aren't great, but then again you won't attract any interest at all on capital held on deposit under an offsetting arrangement.

Possibly instead of advocating not using any ISA allowance at all (which the OP should certainly already be exercising if a higher rate tax payer), utilise max annual contribution into ISA, with further diverted SIPPs capital into offset accts with the provider.

I do seem to have ended up advocating the use of an ISA following Thurls post, which was not my intention in contributing here, but has raised its point as a matter of consideration in the realms of mge offsetting for the OP to consider os of his SIPPS arrangement.

Lets not, as usual though, become consumed with side issues - the OPs post was in relation to SIPPS and whether it can be used in an mortgage offset situation - to which the answer as per my first post, and AFAIK - is negative.

Re suggested scheme loan to the OP (good idea) but SIPPS are unable to make a loan to any connected party (a position held by the OP as a scheme member).

Hope this helps the OP

Holly