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New ISA rules may make the ‘5,000 miles for a Virgin ISA’ more attractive

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Above all the noise in the UK Government budget about pension changes, you may have missed the changes relating to Individual Savings Accounts, or ISA’s:

ISA’s will be renamed NISA’s (‘New ISA’s’)

From July 2014, the annual limit on (N)ISA contributions will increase to £15,000

There will no longer be restrictions on how this must be split between cash and equities / bonds

You will, for the first time, be able to move money from a ‘stocks and shares’ ISA into a cash NISA

That last point opens up an interesting arbitrage for some people, including myself and my wife.  Every year, we use our cash ISA allowance to the maximum.  We do not use the ‘stocks and shares’ part of our annual allowance because we have / had jobs which are City based – we already have enough of our future tied up in the well-being of the stock market!

However, I AM now going to open a ‘stocks and shares’ ISA in the current tax year, to use up my £5,760 allowance.  Why?  Because, after July, I can close it down, liquidate the assets and turn it into a cash NISA!  Effectively, going this route allows me to sneakily double my investment in a cash ISA for the 2013/14 tax year.

But which ‘stocks and shares’ ISA to pick?

As it happens, Virgin Money is offering 5,000 Flying Club miles to anyone who open a new FTSE Tracker ISA. See here for full details.

There are two ways to invest. You can either invest a lump sum of £1,000, or make a £75 monthly investment for at least six months. In either case, you must leave the account open for six months.

You hopefully don´t need me to remind you that this is an investment product and you could lose some of your capital – these miles are definitely not risk free!


The less risky option is £75 x 6 months = £450 invested. If you valued the miles at £50, you would still come out on top with a 10% fall in the market by the time you exit.

The £1,000 lump sum investment is clearly riskier – the value of the miles is wiped out with just a 5% fall in the market. As your entire £1,000 is invested on Day 1, you are also losing out on proportionately more bank interest as well.

You cannot open this ISA if you already have a ‘stocks and shares’ ISA for the current tax year. You can open one if you only have a ‘cash’ ISA for the current tax year.  The small print says that the offer is once per customer, although I know people who have opened one of these in earlier tax years and got the miles a second time.

This is certainly not one for totally unsophisticated investors.  However, if you don´t need the money back in the short term then you do at least have the flexibility to sit it out until the market gets back to your original investment level!

My plan is to open a Virgin Money ISA with my full remaining ‘stocks and shares’ allowance of £5,760 for the current tax year, and then close it down – transferring the proceeds to a cash ISA (by then they will be called NISA’s) – in exactly six months time.  If for some reason it is ‘out of the money’ at that point, I will simply let it run until it gets back to the original level.

How to earn Virgin Points from UK credit cards

How to earn Virgin Points from UK credit cards (April 2024)

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

You can choose from two official Virgin Atlantic credit cards (apply here, the Reward+ card has a bonus of 15,000 Virgin Points):

Virgin Atlantic Reward+ Mastercard

15,000 bonus points and 1.5 points for every £1 you spend Read our full review

Virgin Atlantic Reward Mastercard

A generous earning rate for a free card at 0.75 points per £1 Read our full review

You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.

American Express Preferred Rewards Gold is FREE for a year and comes with 20,000 Membership Rewards points, which convert into 20,000 Virgin Points.

American Express Preferred Rewards Gold

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

The Platinum Card from American Express comes with 40,000 Membership Rewards points, which convert into 40,000 Virgin Points.

The Platinum Card from American Express

40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review

Small business owners should consider the two American Express Business cards. Points convert at 1:1 into Virgin Points.

American Express Business Platinum

40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Click here to read our detailed summary of all UK credit cards which earn Virgin Points

(Want to earn more Virgin Points?  Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)

Comments (32)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Dan says:

    If you already have an existing equity ISA e.g. Selftrade but have or have not used up your current tax year ISA allowance, can you still open another ISA with Virgin Money (I have no plans to transfer my existing one from Selftrade as I just want the Virgin miles).

    • TimS says:

      You can only have one cash and one Shares ISA per tax year. Therefore if you have already opened a stocks and shares ISA in this tax year you cannot open another, even if you didn’t use your full alliance in the first one.

      • Dan says:

        I have not opened a new ISA this year. I have an existing ISA since 2002 and have contributed before the end of each tax year.

        I have yet to contribute to the current year’s one nor have I “opened one this year”.

        So I eligible to apply for this?

    • Rob says:

      If you contributes this tax year to Selftrade I assume you are blocked, if not I imagine OK.

  • Mr Bridge says:

    the value of your investment can go down as well as up….there has to be an airline joke in there somewhere!!

  • Stewie says:

    It’s not a website about grammar, either

    What are those apostrophes doing in ISA’s??


  • Nick says:

    If you were worried about changes in the value of the FTSE, could you invest in some sort of ETF at the same time that hedges against movements? Or use spread betting?

    • Rob says:

      You could, but it isn’t worth it for the sums involved. And on a large scale it doesn’t really work, or everyone would do it.

  • Dan says:

    Is it in black and white that you can convert a stocks and shares ISA into a cash NISA, come June/July? (Or in the case of this virgin offer, September.)

  • Caffers says:

    Just to clarify on when the Virgin Miles post: It seems according to the T&Cs that the miles will post upon account opening, but will be removed if account is closed/un-funded during the six month period.

    Have the miles posted immediately in people’s experience so far of this offer?

    (The reason I ask is that I’m tantalising close to my VM target, and need to book the flight in the next month or so, rather than wait an additional six months)

    • Rob says:

      I believe they do post quite quickly – perhaps someone will know (I was told but have forgot!). If mine post soon I will update this post, but the money was only taken from my account yesterday.

      • Simon says:

        My miles posted 2 days after I applied, I went down the direct debit route and so they hadn’t even collected any money at that point. I was very impressed.

        I was hoping to close my account and open another in the next tax year but annoyingly my final £75 payment won’t be collected until after April 5th.

  • Matthew says:

    What can 5000 Virgin Miles get you..?

    • Rob says:

      Nothing (well, a one way on Little Red). Need to be topped up with Tesco or Amex points to get to much.

  • pazza2000 says:

    The miles post very quickly after the first deposit. I have always paid the minimum £75 for 6 months and then closed, although wonder if I should have as i have always came up top on interest (5%+), although as Raffles has said, you could loose a little also. Will apply again next month for another easy 5k

    • Singing Dwarf says:

      Have you earned more than one set of 5k points?

      From the terms and conditions of the offer:
      7. The offer is limited to 5,000 bonus miles per eligible application. One per customer.

      This implies to me, although not explicitly stated, that only one payment of 5,000 miles is (ever) made to one customer?

      • Rob says:

        I assume he is in bed now (!) but I know for a fact that he has got the bonus in multiple tax years, opening a new ISA each time. The old one had been fully closed down by the time he opened the new one though.

        • pazza2000 says:

          Correct; 5k each tax year since ’11. Nothing lost, if anything I’ve earned more interest on the small sums temporarily held in the ISA than I have in my other savings products. Takes minutes to apply and cancel also, I suspect folks think otherwise as it appears to be fairly overlooked.

          • Rob says:

            Agree, it was surprisingly quick to apply online and pay with a debit card. Paperwork came within 3 days, nothing to sign and nothing to send back.

          • Singing Dwarf says:

            Thanks, I’ve given it a go as nothing to loose – other than the value of my investment 😉

          • Singing Dwarf says:

            So if the account I opened last week (2013/14 tax year) is closed after six months (say Sep 2014), I could then open another account between then and April 2015, in order to get the 5k bonus for the 2014/15 tax year too?

          • Rob says:

            Correct, based on past experience.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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