Research carried out by First Direct demonstrates that a typical cash ISA saver who also has a mortgage would have been better off placing their savings in an offset mortgage over the last 10 years.

A saver placing the maximum allowance into their cash ISA since April 6th 2000 would now have accumulated £38,238 on average.

By contrast, had they offset that money they would have saved £31,200, while at the same time knocking £10,434 off their mortgage, giving a total saving of £41,634.

Richard Tolchard, senior mortgage product manager at first direct, commented:

“For people without a mortgage or possibly nearing the end of their mortgage, cash ISAs are often the most efficient way to save cash.

“However for savers who hold a mortgage, this analysis show that cash savings work harder offsetting against a mortgage than they do within a tax efficient ISA.”