JC: This is a fantastic product for self-employed people irrespective of their tax bracket. For anyone who is self- employed, irregular lumpy amounts of money and biannual tax bills mean that using offset ensures you’re using your money efficiently. RS: We are going to have a lot more higher rate tax payers in this country over the next five years because of the sheer force of what will have to happen to cut the structural deficit in this country. In a marginal sense we should be thinking about offset as something that can help mitigate our tax position.
I also think we may see a change in
people’s behaviour away from being debt-ridden to having a little bit of money behind them - particularly with the pending rise in unemployment that will hit. This fits into the idea of holistic financial planning.
two things there. One is educating the public but the other is educating the broker. Brokers can still fall into the mindset of chasing the lowest 2-year rate. There needs to be some re-education looking at the complete financial picture for the client and recommending the appropriate product.
Christine Newell: I think you’re right about that. We’re predominantly an IFA business and around 16% of our business last year was offset. It fits into these businesses because they’re doing a full financial review. SL: Once brokers have understood offset they’re hooked on it. They do then sell a lot more. It’s just getting to the point
where you understand it well enough that you feel confident explaining it to a client.
oFFset is oFten reFerred to as tax eFFicient. with higher rate tax now Payable at 50% who are the borrowers who should consider oFFset who might not have beFore? MF: Savings rates are between 2% and 4% at the moment and if you’re a higher rate tax payer you’ll only see half of that. On top of the higher return in an offset deal you haven’t locked your money away for two or three years. There’s perhaps a bit of education to be done.
how can brokers use oFFset as a way to kickstart that conversation? JC: Broadening your business to offer holistic financial advice makes great sense and traditionally the mortgage has been a good foundation for selling other things. An offset mortgage is the ultimate foundation – you can start to talk to clients about savings, investments and pensions. It’s a fantastic foot in the door. If you speak to your clients every six months or so that in turn helps to build a stronger relationship. AM: Having a fuller conversation about a client’s finances demonstrates a level of professionalism that differentiates you from a lot of other brokers out there. It helps the clients buy into you more and opens up other sales. I think it really proves the concept of advice. SC: We had a client recently who had
OFFSET AN AWARD WINNING LENDER For intermediaries only
We have won ‘Best Offset Mortgage Lender’ for the last four years.
www.woolwichintermediaries.co.uk
Mortgage Introducer Strip ads_180x29_AW 1 mortgage introducer APRIL 2011 39 31/03/2011 12:47
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