I think the key thing is flexibility - the money is not tied in with the offset mortgage. If you find a better investment, you can always take some of it out and put it towards that instead.
Once it matures, if there is nothing good to reinvest in, then it can go back into the offset mortgage.
Once you have had money in the offset account, even if you take it out, you have already (irreversibly) saved money on your mortgage.
Right now you would be pressed to find an instant access ISA with a rate higher than 1.5%, so if you need immediate access, then the offset account seems good.
On the other hand, for retirement, you might be saving longer term, and then you can get an ISA rate of 3%, currently, which may be better for a part of the money (or perhaps the upcoming Lifetime ISA with 25% yearly bonus may make sense for part of the money), if you do not need easy access to all of it.
As Dilip says, this assumes you want safe investments.