One with a hopefully obvious answer!

[SittinOnTheDock]

I have a mortgage fixed for four more years at 2.8%. As I can get more on savings currently there's no point overpaying. But if savings rates plunged again next year I might regret not over paying this year as there's a ten per limit each year.

So the best thing for me to do if I don't want to worry about rate changes is to put the overpayment money into a 4 year fixed rate to guarantee it will earn more than 2.8%? And then see whether to reduce the mortgage balance when I remortgage in four years.

This will always be better than actually over paying, right?

I'm thinking with the fixed rate savings I could also access the money if I needed to in an emergency, although it might mean forgoing some interest.

Why not use 1yr fixed savings, the rates are still estimated to increase this year so you could earn even more fixing again next year. You are hedging your bets and could make an overpayment at the end of the 1yr fix if you wanted.

You could put your savings in different accounts with different terms.

If you are talking about spare money from income rather than lump sums you already have you could set up regular savings accounts, which pay 5 to 7%, for some you need a current account to access. Look on Moneysavingexpert.com for a list.

But it's probably unlikely that interest rates will drop enough for this to be an issue. The last 15 years have been an anomaly that we probably won't return to in the short to medium term at least.

You could use a regular saver for 12 months (with a good rate, up to say 7%), then tie the matured sum up for 3 years in a fixed rate bond or ISA to lock in a good rate (you’d have to weigh the rates with any tax burden, subject to how much you’d saved). Then repeat the process with another regular saver.