How to earn Flying Club miles with the Virgin Atlantic 1 year Flying Club Savings Account

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This article is sponsored by Virgin Money

One of the more interesting ways of earning Virgin Atlantic Flying Club miles is with the Virgin Atlantic 1 year Flying Club Savings Account.

The partnership between Virgin Atlantic and Virgin Money is really developing. We have covered the two new Virgin Atlantic credit cards in depth as they are exceptionally good – read our overview here. The current life insurance deal is also decent with a bonus of up to 25,000 Flying Club miles. It has also just introduced a bonus of up to 22,500 miles for ISA transfers and 8,000 miles for opening a new ISA.

Today we want to look again at the Virgin Money Savings Account, as I was intrigued by the ability of earning miles as you save rather than as you spend.

The Virgin Atlantic 1 year Flying Club Savings Account was launched last year, but the earning rate wasn’t that great initially. Virgin Money relaunched the offer with a far better underlying interest rate.

Full details are on the Virgin Money website here.

How the Flying Club Savings Account works

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 Atlantic Flying Club miles for every £1,000 you save.

Virgin Atlantic 1 Year Flying Club Savings Account review

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 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

When the deal launched in June 2018 it was only paying 1,400 miles per £1,000 you saved, based on an interest rate of 1.19%. The jump to 1.36% is therefore significant.

In general, I would be a buyer of Virgin Atlantic 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!

As always with these offers, if you know that you will generate more than 0.85p per mile when you redeem (which isn’t difficult) this could be worthwhile.

Virgin Atlantic Flying Club 1-Year Savings Account

Are you really paying 0.85p per mile?

The 0.85p per mile valuation only holds if this account is ‘top of the market’.

Looking at Moneyfacts, the top 1 year bonds currently on the market from what I consider ‘blue chip’ institutions (although this depends on your personal definition of ‘blue chip’) are 1.2% – 1.45%. On this basis, the Virgin Money account – at 1.36% – is competitive. You can get higher rates from lesser known financial institutions which also have FSCS protection up to £85,000.

The higher you value a Virgin Flying Club mile, the better this deal looks

Let’s imagine that you’d be willing to pay 1.25p for a Flying Club mile, because you regularly redeem in a particular way which gets you a higher valuation than usual.

On this basis, you’d be getting the equivalent of (1,600 miles per £1000 x 1.25p per mile) 2.0% interest on your money, which is exceptionally high in the current market.

One point to remember is that you won’t receive your miles for a year.  You need to keep in mind the risk of any potential Flying Club devaluation – there isn’t an option to stop the conversion of your interest into miles at the end of the year.

Get access to Virgin Money lounges

You will also get unlimited free access to all Virgin Money lounges if you open a Virgin Money Savings Account. To find your nearest lounge visit the Virgin Money website.

Conclusion

Virgin Money has now put a bit of life behind this product with the increased interest rate and hopefully it will get some traction.  I will be genuinely interested to see how it goes.  You can find out more on the Virgin Money website here.

How to earn Virgin Atlantic miles from UK credit cards

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

Click here to read our detailed summary of all UK credit cards which earn Virgin Flying Club miles.  That page is regularly updated with the latest special offers and will still be accurate even if you are reading this article months after publication.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)

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Comments

  1. OT: 2000x 30day free trial of FlightClub premium service at M Lewis site.

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