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How to earn Avios from Barclays Premier WITHOUT switching banks

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The new Barclays Avios Rewards scheme from Barclays Premier seems to be proving popular with Head for Points readers. The lure of an annual British Airways upgrade voucher is, unsurprisingly, attractive.

Some people have been put off by the requirement to move their day to day banking to Barclays Premier, or the requirement to have a £75,000 income. Whilst it makes sense to use a ‘premium’ banking service if your salary allows it – they are usually free, after all – you may be happy with HSBC Premier or similar.

All is not lost. You CAN have a Barclays Premier account even if you don’t have a £75,000 income or don’t want to move your day to day banking across.

How? By depositing £100,000 in a savings or investment account with Barclays.

Barclays Avios Rewards

If you don’t have a spare £100,000 floating around then this isn’t for you. Feel free to move on to the next article.

Are Barclays savings and investment accounts competitive?

It is fair to say that Barclays is not known for topping the ‘best buy’ lists with its savings products. Whatever interest rate you are offered will, almost certainly, be beatable elsewhere.

However, given how low interest rates are at the moment, it won’t be beaten by much. Factor in the tax on the interest you earn and the benefits of Barclays Avios Rewards start to look attractive.

Basically …. whilst rates remain at rock bottom levels, you may value getting the Barclays Avios Rewards benefits more than you value a little bit of extra interest.

In terms of non-ISA cash savings, the current Premier ‘exclusive’ is a 2-year flexible bond (withdrawals allowed subject to conditions) paying 0.30%.

There is also a one-year fixed rate cash ISA paying 0.25%. You could transfer an existing cash ISA product into this.

Because interest from an ISA is untaxed, it would make more sense to move cash which you have outside of an ISA wrapper into Barclays. The weaker interest rate is less noticeable on taxable interest.

For example …. let’s assume that you could get 0.6% elsewhere vs the Barclays Premier 2-year flexible bond offering 0.3%. (The Barclays product allows withdrawals so is more flexible than a standard 2-year fix and shouldn’t be compared like for like.) Based on a £100,000 investment, you would be getting £300 less interest per year with Barclays. If you are a 40% taxpayer, your net ‘loss’ would be £180. For a 45% taxpayer it is even less. Is it worth £180 per year to get access to Barclays Avios Rewards? Yes, potentially.

Barclays also has the usual range of stocks and shares ISAs etc which would accept a transfer from an existing non-Barclays product in order to meet the £100,000 criteria.

How do you open a Barclays Premier account based on savings and not income?

Barclays does not make it very clear how you go about opening a Barclays Premier account based on savings and not income.

I have been working through this with the Barclays team and this is what they told me:

Situation 1:

You earn less than £75,000 but do have £100,000 in cash or investments you could place with Barclays

This is a little complicated, because the online application system for Barclays Premier requires you to declare an income of £75,000+.

This is the route I am told that you need to follow:

  • Use the form on this page to open a Barclays Premier account. Once you state that your income is below £75,000, you will be down-sold to a standard Barclays current account.
  • You call the Premier upgrade team on 0800 197 1059 to say that you want the account upgraded to Premier on the basis that you will be moving £100,000+ into a Barclays savings account
  • Your account will be upgraded and you will have access to Barclays Avios Rewards

The reasons that you should get your account upgraded BEFORE you move the £100,000 is that you will then have access to the exclusive Barclays Premier products.

Whilst it is theoretically possible to do all of this via a branch, Barclays has asked us not to encourage this due to social distancing measures. Many branches have suspended personal appointments entirely.

Scenario 2:

You do earn £75,000 but would prefer not to move your day-to-day banking to Barclays Premier

This is a far easier scenario.

  • Use the form on this page to open a Barclays Premier account – it will work OK because you are declaring an income of £75,000
  • Once the account is open, move £100,000 into a savings or investment account with Barclays. You need to do this before Barclays makes the first check as to whether your salary is going into your new Premier account or not (which it won’t be)
  • You will have access to Barclays Avios Rewards from Day 1

You will need to keep some money in your Barclays Premier current account to fund the £12 monthly fee for Barclays Avios Rewards, but you don’t need to pay your salary into it.

How does Barclays Avios Rewards work?

To avoid making this article excessively long, I don’t want to go into full details again about how Barclays Avios Rewards works. Instead, take a look at this HfP article which outlines Barclays Avios Rewards in detail.

Barclays also has a dedicated page for Barclays Avios Rewards which you can find here.

I hope you found this easier to follow than the official Barclays website when it comes to working out how to access Barclays Avios Rewards via savings. I think it is an interesting option that will appeal to some readers.

How to earn Avios points from UK credit cards

How to earn Avios from UK credit cards (December 2021)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways BA Amex American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios:

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus:

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)

Category

Barclays Avios Rewards

Comments (48)

This article is closed to new posts. Discussion continues in the HfP Forums.

  • Jon says:
    10 Aug10 August 06:27

    In the end for me, I decided Barclays customer service wasn’t worth the Avios and I closed my ‘premier’ account. Having used First Direct for a few years now it turns out I am willing to pay a fair bit to not get angry every time I interact with a bank. Maybe others have more patience!

    • SB says:
      10 Aug10 August 08:55

      Same.

      Wanted to open a premier account and a smart investor account and never successfully managed to open the former or transfer any investments to the latter…

      • Sandra says:
        10 Aug10 August 10:24

        @ Jon- Not thinking of moving banks yet & Barclays wouldn’t be the choice if we did but I have to say, as customers of over 25 years, First Direct has recently got much, much worse for customer service. I used to recommend them to all and sundry but at the moment I couldn’t. Covid plays a part but a lot of issues seem to stem from when they updated everything online a couple of years ago.

    • Tim says:
      10 Aug10 August 11:04

      I did share that view until the millennials that redesigned the FD banking website and app made them incredibly frustrating to use. Barclays did the same around 2013. Prior to then Barclays was probably the best of the lot. Not one of the big four has a simple, clear web interface. And all four have previously had better versions. Arguably LBG is the closest. Although it, and NatWest, have virtually the same underpinnings as they did 20 years ago. It’s all about apps now. Trying telling that to an Excel spreadsheet… 🙂

      • Sandra says:
        10 Aug10 August 11:17

        I’m glad it’s not just me Tim. Every time I complain to them about their poor redesign they tell me that I’m virtually the only person who is unhappy with it!

        • Bobri says:
          10 Aug10 August 11:28

          You’re not the only one in this. Also in webdesign all the webpages got bigger elements to accomodate the mobile users and it was much better and logical before

  • Jonathan says:
    10 Aug10 August 06:41

    Reads as a pure advert.

    • Jonathan says:
      10 Aug10 August 07:03

      To be fair, Rob lays out pretty much all the relevant facts. If you don’t rate the deal on offer then that’s a personal decision. There’s no hard sell.

      Perhaps a slight oversight in not mentioning the savings interest tax free allowance of £1k/£500 for higher/basic rate taxpayers but that doesn’t move the dial much.

      • Rob says:
        10 Aug10 August 08:34

        If you’ve got £100k sloshing around you are already at the interest cap.

    • Memesweeper says:
      10 Aug10 August 08:25

      I can’t remember the last time I read an ad pointing out there were “best buys” available elsewhere.

    • Rob says:
      10 Aug10 August 08:41

      It is a 100% factual piece of writing which has taken over a month to put together …..?

      • JDB says:
        10 Aug10 August 08:57

        Rob, I really like your style of articles. Detailed focus on a particular product, mention of the pluses/minuses, references to comparable/rival products. Beyond that it is left to the intelligence of the reader to determine if it works for them; perfect.

  • NigelthePensioner says:
    10 Aug10 August 06:45

    So once you factor in the loss of interest at .3% compared with Cynergy instant access at .6% for 12 months AND you add the £144 a year for the Barclays account how much are you paying for another relatively unusable Avios?
    Ill stick with First Direct and my current portfolio thank you very much!

    • Rob says:
      10 Aug10 August 08:38

      The £144 is offset by 18,000 Avios (not 15,000) so the issue is how you value the upgrade voucher.

      In your scenario (ignoring the fact you won’t put £100k in a dodgy back because you are unprotected above £85k):

      Interest lost – £300
      Interest lost adjusting for 45% tax – £165
      Value of upgrade voucher on flight to San Francisco – 50,000 Avios

      So, yes, it is a good deal.

  • Joe says:
    10 Aug10 August 07:02

    Or alternatively, if you don’t want to switch your day to day banking to Barclays – just open a new basic current account and switch it to Barclays and run it as an additional account.
    So long as you pay the requisite amount in every month and don’t transfer it straight back to the same account I can’t see this being an issue.

    • BuildBackBetter says:
      10 Aug10 August 10:00

      Some banks have closed down even the primary accounts when a few people tried this (opening secondary accounts purely for switching)

  • Lynn says:
    10 Aug10 August 07:25

    Whilst it is highly unlikely that Barclays will fail I do think it is worth mentioning that the FSCS deposit protection limit is £85,000 per authorised firm.

  • Will says:
    10 Aug10 August 07:30

    Bonus not available to existing Barclays customers. Didn’t see that mentioned by Rob. Pointless exercise.
    Note however that Lloyds are imminently closing their grandfathered free packaged platinum accounts when £4500 is kept in balance. The £17/21 fee will apply to all. Anyone seeing something different?

    • Rob says:
      10 Aug10 August 08:32

      Eh? If you already have a Barclays current account then Barclays already is your core bank!

      This is a workaround for those who want to stick with HSBC Premier, Coutts etc.

  • Gin and Tonic Please says:
    10 Aug10 August 08:23

    What was the consensus on running both Barclays and HSBC again? I think it was to have HSBC as primary (with income paid in) and then transfer money across to Barclays. Was that right?

    • Memesweeper says:
      10 Aug10 August 08:26

      Other way round for me. I’m not sure it matters much, but you really ought to have some DDs and other normal payments coming out of each of them.

      • Roy says:
        10 Aug10 August 13:59

        On paper, HSBC seems to have a requirement (at least according to the web site) that you have your income is paid into it – even if you are qualifying based on investments rather than income.

        Barclays doesn’t have such a requirement, and based on this article (which Rob says they consulted Barclays on) it sounds like there’s no need to engage in any pretence, and you just need to have enough funds in your current account to pay the fee.

    • Tariq says:
      10 Aug10 August 22:14

      This is how I do it. Transfer £800/month across to Barclays (the old qualification criteria for Blue Rewards), have a few DDs paid out from the Barclays a/c then transfer the excess back to HSBC.

  • The Savage Squirrel says:
    10 Aug10 August 08:27

    Whether the rate is 0.3% or 0.6%, the opportunity cost of doing something more useful with that money than paltry cash returns is far greater.

    • Doug M says:
      10 Aug10 August 09:54

      Prior to 17th May if you had that £100K invested in a general investment account you could have earned £500 cash back for transferring it to Barclays. That would offset 5 years of the cost of running the account assuming you invest in other than funds. During that time you could have got the Premier bank account based on this not income.

This article is closed to new posts. Discussion continues in the HfP Forums.

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