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Virgin Money tweaks its miles-earning savings account

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Virgin Money has launched a new version of the Virgin Atlantic 1-year Flying Club Savings Account.

This is an interesting product which no-one has tried before.  You make a one-off deposit of between £1 and £1 million into a one year bond.  No further deposits and no withdrawals are allowed over the one year period.  Instead of cash interest, after one year you will receive 1,600 Virgin Flying Club miles for every £1,000 you save.

Full details are on the Virgin Money website here.

In case you are wondering exactly how this works, and whether you can escape Income Tax if you pay it on your savings (you can’t), this is your answer:

Virgin Money pays you interest based on a rate of 1.36%

Your interest is immediately taken back and used to purchase Virgin Flying Club miles at – effectively – 0.85p per mile

In terms of the income tax position, the interest should be included on any tax return and will count towards your Personal Savings Allowance, like any other savings interest

In general, I would be a buyer of Virgin Flying Club miles at 0.85p – except for the fact that I am sitting on over 1.5m of them between my wife and myself and that’s probably enough for now!  You need to compare the notional 1.36% interest rate with comparable accounts from other institutions with a similar risk profile.

A new version of this account was launched this week.  The interest rate is unchanged, but the savings term if you apply today runs to 20th January 2020.  This means that you are actually putting your money away for 13 months.

You can find out more on the Virgin Money website here.

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.)

Category

Virgin Atlantic and Flying Club

Comments (107)

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

  • BJ says:
    15 Dec15 December 06:05

    Plugging the Virgin savings account is fine but for balance I wish you would also highlight the downsides of this account.

    • ChrisC says:
      15 Dec15 December 10:18

      And what would the downsides be or what do yiu think they are?

      Rob mentioned you still have to declare the interest for tax purposes and that its a one year account and some of the other rules.

      And anyone who is thinking of this account is going to read the full T&Cs before opening an account and make an informed decision.

      • Mr Dee says:
        15 Dec15 December 21:57

        Realistically you can easily get 1.6% for a savings account for less than 1 year which means that this is costing 1p per mile, you will also be using up your tax free allowance so this means you could end up also paying further tax if you use your allowance up.

        • Shoestring says:
          15 Dec15 December 22:04

          I’m getting a guaranteed 3.57%, up to more than £50K savings

        • Shoestring says:
          15 Dec15 December 22:07

          Anyway, if you want a much better rate of return, just pump some more money into your pension.

    • Paul says:
      17 Dec17 December 12:22

      I’m being a bit stupid here. If VM are going to hold the money for 13 months instead of 12, does that maen I will get more than 1600 miles? The AER has not changes as far as I can see and that refers to 12 months….

  • Brighton Belle says:
    15 Dec15 December 07:00

    Ok, tell us what you think we should know beyond Virgin devaluations of miles

    • BJ says:
      15 Dec15 December 07:53

      That, plus the interest rate plus the absence of flexibility to do what you like with the interest which most people would likely wish they had should a devaluation happen.

      • Shoestring says:
        15 Dec15 December 08:01

        The notional 1.36% interest rate is there. It’s obvious you are tying yourself into receiving Virgin miles, with no cash alternative.

        What’s your point, BJ? I guess a couple of alternatives could be briefly mentioned – but HfP is not some kind of wet nurse and people need to assume basic responsibility for their own financial affairs. A 2 minute google of best buy savings a/cs would bring up plenty of alternatives.

        • Mr(s) Entitled says:
          15 Dec15 December 08:10

          I’d agree. Rate, liquidity, need to shop around are all mentioned front and centre.

          Assuming you went with a ‘better’ alternative could you use your cash interest to buy Virgin Miles at 0.85p? I’m not a collector or buyer. But if you need Miles it might be worth the sacrifice of a few extra bps interest.

        • BJ says:
          15 Dec15 December 10:11

          The issues might be obvious but there’s always somebody…

          I guess my point is that Rob is usually good at pointing out pitfalls and limitations in his articles but not here although I appreciate it’s bits and not a full analysis. Still, as Mr(s) Entitled demonstrates it can be covered in one short sentence.

    • the_real_a says:
      15 Dec15 December 13:24

      I guess the “opportunity cost” is a 1 year bond, which the best buy table says is 1.65% giving a delta of 0.25% to the virgin account.

      • the_real_a says:
        15 Dec15 December 13:25

        sorry 0.29%

        • Jon says:
          15 Dec15 December 13:53

          It would be a bit more than that if you are using the top of the best buy table- 2.05% via investec.

        • the_real_a says:
          15 Dec15 December 16:37

          Or 2.25% with Metro Bank for 18 months. With those rates it does seem to make the Virgin account poor value.

        • Mr(s) Entitled says:
          15 Dec15 December 16:42

          That depends if you want Virgin Miles and if you can buy them with your cash return elsewhere for 0.85p or if you increased return is wiped out by increased cost.

      • Mr Dee says:
        15 Dec15 December 20:06

        Yes you must use the top 1 year savings account rate to compare this deal to and that is how much the points are costing you.

  • Alex W says:
    15 Dec15 December 07:01

    Gutted. I was looking forward to spending IHG points at Belmond hotels such as Machine Piccu.

  • Simon says:
    15 Dec15 December 07:33

    Ot. I have a Marriott offer on my Amex. Spend £500 before end of January 2019 for £100 off. I’m looking to stay next May. If I pay now when booking for a stay after the offer close date, does anyone know if this qualifies for the offer of £100 off?

    Can’t find anything about staying by 31/1/2019 in the terms, just paying.

    TIA

    • Alan says:
      15 Dec15 December 07:38

      Should be fine – with all these Amex offers it’s when the card is charged that’s normally the issue. Watch out though as to which properties it’s valid for.

    • Rich says:
      15 Dec15 December 12:31

      I think there are some reports of hotels ‘helpfully’ not charging your card immediately, even though it’s a prepay rate. Worth a call to the hotel if you don’t see the charge on you statement within a few days.

  • JJ says:
    15 Dec15 December 08:03

    Well I was fortunate enough to stay at Le Manoir Aux Quat’Saisons in Oxfordshire last week and it certainly didn’t feel “past it’s prime”.
    It was a self financed leisure trip paid for out of my tax paid earnings so was obviously a luxury treat. I haven’t stayed in enough “uber luxe” properties like this to be able to compare, and it’s perhaps hard to describe an expensive stay as “value for money”, but my wife and I felt it was worth the cost for what was a memorable experience.

    • Sussex bantams says:
      15 Dec15 December 08:48

      Does a “self financed leisure trip paid for me out of my tax paid earnings” mean “cash” ?

      • JJ says:
        15 Dec15 December 09:06

        No, It means it wasn’t a company paid business jolly!

      • Jon says:
        15 Dec15 December 10:37

        Very unlikely. Most probably payment was made using a personal credit card.
        Have you witnessed many guests booking hotels with “cash”?

        • Chris says:
          16 Dec16 December 08:18

          I should think anyone using cash Vs points earning credit/charge for anything would receive a lifetime ban from Rob!

  • Yuff says:
    15 Dec15 December 08:08

    Can someone please post a quick reminder on expiry if virgin miles is it 2 years unless you earn a virgin mile which resets the expiry? I have 300k in mine and mrs yuff’s account.
    Also has anyone transfer Tesco cc Ro Avios recently, transferred some from my daughters account, as they were expiring 2 weeks ago, into our household account and they haven’t arrived yet.
    Had to spend £500 over 3 accounts to stop expiry fortunately £200 went to hotels.com for the park Hyatt in Mallorca….£116 a night 😉

  • Yawn says:
    15 Dec15 December 08:12

    OT: I’m annoyed with Amex Shop Small. I did a fair bit of Christmas shopping at the Winchester Christmas market and none of the purchases seems to have been eligible. No way for me to check their map, of course. Just assumed that there can’t be anything smaller than a market stall, surely?

    • Shoestring says:
      15 Dec15 December 08:19

      The suck it & see strategy – I like it! 🙂

    • Lewis says:
      15 Dec15 December 08:27

      Not sure why you couldn’t check the map? It’s only ones that show on there that count. I know plenty of places in Bath which aren’t taking it but technically are “small”, doesn’t mean they’ve signed up!

      • Gin and Tonic Please says:
        15 Dec15 December 09:29

        Not entirely true. I’ve had 3 shops trigger the offer, despite not being listed on the map.

      • Mr Dee says:
        15 Dec15 December 20:10

        Signed up? Pretty sure they don’t have to specifically sign up as their map has plenty which don’t accept Amex so they wouldn’t have signed up

    • AlexT says:
      15 Dec15 December 09:02

      Depends on how payments are handled. If a single firm provides transaction services for the whole lot, it would never trigger shop small. That, and most participating retailers are restaurants.

      • Gordon says:
        15 Dec15 December 09:58

        Yes but if they are on the map with this system you must have a right to claim your £5?

        • Alex W says:
          15 Dec15 December 11:23

          Conversely if they are not on the map you have no come back. So the suck it and see strategy is risky.

    • Polly says:
      15 Dec15 December 09:05

      Seriously, you can’t take 5 minutes to check a list before embarking on a shopping trip?

    • Lumma says:
      15 Dec15 December 09:29

      At winter wonderland for example all the stalls seem to use izettle for their payment system and from investigating stores near where I work those that use the same system aren’t on the shop small map, even though they tick all the boxes for being a small independent business that accept AMEX. Perhaps this Christmas market is the same

      • Gordon says:
        15 Dec15 December 09:55

        I’m having an issue with a pub that is showing Izettle on my statement. 8x£5 I am due back but Amex want the receipts from the merchant. The address shows Sweden so is it down to the card machine they use?

    • Ian Perry says:
      15 Dec15 December 09:39

      This happens every year, and it’s a bit of a (fun?) gamble. One local butcher shown on the map doesn’t even accept Amex. Conversely, spending at a couple of local shops not shown on the map have resulted in £5 credits. Getting £5 off is nice, but don’t ever rely on it to feed your starving children!

      • Sussex bantam says:
        15 Dec15 December 10:44

        I paid for staff Xmas lunch (just shy of 1k) yesterday at a restaurant not shown on map. Put it all on my BAPP.

        This morning got a shop small credit. Very irritated now as I could have split it across 10 cards easily !!

      • Lewis King says:
        15 Dec15 December 10:56

        It’s a fun map… my favourite pub was showing on it this year (know they don’t take amex usually) but they have a new card machine! I’d have never have tried without seeing this and now I will definitely be there more often haha

      • the_real_a says:
        15 Dec15 December 13:31

        Izettle is a payment aggregator like paypal. It has never tracked and i seem to remember is specifically called out as excluded in the T&C`s… the issue seems to be izettle is substantially cheaper than regular terminal rental, so business`s are moving across to izettle leaving the database for the map out of date.

      • Nigel the Pensioner says:
        16 Dec16 December 07:31

        +1 LOL

    • Mark2 says:
      15 Dec15 December 11:15

      Were the stalls using iZettle or similar, which do not show on your Amex statement as the retailer

      • Tom says:
        15 Dec15 December 11:22

        I’ve found plenty of shops displaying shop small signs for the promo on the counter but not on the Amex map. As ever, the map is useless.

        Had a great haul this year. Come a cropper on iZettle a few times though..showing on the Amex map, but then using iZettle when you get to the store. Will be asking Amex for credit for those!

        • Yawn says:
          15 Dec15 December 23:13

          Actually, two of the stalls on the market used those iZettles. Didn’t know they would be off limits. You’d think that the people using them would be “small” by definition!

          Given that the market is there only one month a year, I’m not sure how the map could have helped so I just gave it a try. Might try and complain to Amex though only complained about another offer not tracking two weeks ago…

      • Mike says:
        15 Dec15 December 11:51

        Have also had izettle fail to track – if izettle is a spanner in the works of this huge promotion, you’d think Amex would try to come up with a blanket solution rather than be bombarded with complaints/requests to sort out everyone’s individual transactions.

        • Liz says:
          15 Dec15 December 13:28

          I am having a very good year this year with Small Shop. The few shops or cafes I have used that are not on the map have not credited but everything else is crediting so far even when emails are not received. Had one cafe that was on the list, I put my pin in and then the girl noticed it was Amex and said we don’t take it and cancelled the transaction. They obviously did as it wouldn’t have accepted my pin. Called Amex and got a manual credit. Enjoying the game!

        • Shoestring says:
          15 Dec15 December 13:38

          I pre-cleared with one butcher today to split the bill across 8 cards, same as I have done there the last 3 years. Got 2 beautiful beef joints all packaged for me, then the guy couldn’t work out how to do the till (though same guy did it previous years).

          Went to ask his boss who came out and said he wouldn’t do 8x £10-ish splits as the Amex transaction fee is too high. Wouldn’t discuss it or tell me the transaction fee.

        • Liz says:
          15 Dec15 December 14:25

          That’s a shame it didn’t work for you this year. We have 10 cards this year and managed to get 3 shops do all 10 cards. Going for one final wine shop tomorrow then we are done.

        • RussellH says:
          15 Dec15 December 17:45

          Liz says:
          > They obviously did (take Amex) as it wouldn’t have accepted my pin.

          I had something like this happen last year in a pub. Put my Amex in the machine, it asked for my PIN, PIN accepted, but then transaction was declined. Barman looked at the terminal and told me that it had been declined because they did not take Amex.
          Very odd tho’!

        • Liz says:
          15 Dec15 December 18:29

          I also had a fish shop that was on the map because I added it to my own list of shops to visit, went to buy some fish, wouldn’t accept the card at all, paid with IHG, checked the map when I got home and it was no longer there. Had that twice this year so cannot phone and claim. If it gets as far as the pin being entered then surely they accept it. The girl got all flustered saying she would need to speak to her boss so obviously took it but not allowed to take it. Some shops so against it because of fees and others more than happy with Amex.

          Local wine shop today said because of me telling them about Amex and our airmiles travels in the past they pushed Amex for a better deal and now take it and many customers use it. Going back in tomorrow for a few more bottles. I was telling them about our trip to Oz this year all on airmiles – the customer behind me was a young guy paying with his blue BA card. He said he was trying to get enough points for an upgraded flight so I put him on to HFP!

        • Mr Dee says:
          15 Dec15 December 20:26

          @liz

          Some machines can accept Amex but when the machine connects if they have chosen not to accept Amex in their merchant account then it will decline, tried it in a place that was on the map, very annoying.

        • Chris says:
          16 Dec16 December 09:13

          I don’t think Amex could possibly have been any clearer that PayPal, Ape Pay, iZettle etc are not small merchants. It’s written clearly in every single promotion year-round, if anyone has managed not to read any of them all year that’s really on you.

          PayPal looked to buy iZettle for $2.2bn this year, if that’s your idea of a small business then I’ve bad news for you – it isn’t anyone elses!

    • Kevin C says:
      15 Dec15 December 14:30

      Was pleased that Slam City Skates qualifies for Shop Small, if any of you want to buy your festive skate wear before or after visiting the Amex lounge in Covent Garden. The big Stanford Books works. The Christmas Stanfords (literally opposite) the lounge I didn’t try.

  • Geoff Barrow says:
    15 Dec15 December 10:14

    Having stayed at a number of Belmond properties throughout the world (as well as Four Seasons, Aman, Oberoi, etc), I can see why LVMH would want to acquire the brand, and I am not sure why you hold the view that you do (particularly as you seem to think that Hilton has merit as a brand!).
    The properties may need some upgrades, but service levels are consistently high, and the iconic buildings and locations offer a great basis for a luxury hotel brand.

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