These work by linking your savings and current account to your mortgage so that you only pay interest on the difference.
You still repay your mortgage every month as usual, but your savings act as an overpayment which helps to clear your mortgage early.
You have a mortgage of £100,000. You're paying an interest rate of 3.00%.
You also have £10,000 in a savings account. By offsetting your £10,000 savings you only pay interest on £90,000 of your mortgage.
Over the course of the year this can save you up to £300.
If you'd have left these savings in a savings account paying 2.00% (a pretty decent rate at the moment), you would have earned £200 in interest. If you have to pay tax on your interest, it would be even less.
Plus you'd still have to pay that £300 you didn't save on the mortgage.