Maximise your Avios, air miles and hotel points

How the Nectar and Avios tie-up will change how you earn and spend points

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This is Part 2 of our initial response to the news that Sainsbury’s is the new Avios supermarket partner and that Nectar points and Avios will become interchangeable.

Please don’t read this article before you have read Part 1 of our Sainsbury’s / Avios / Nectar coverage which is here. You’ll just get confused!

How to convert BA Avios points to Nectar points

What is the Nectar to Avios exchange rate?

As a reminder, from Monday, you will be able to convert your points online like this:

  • 250 Avios = 400 Nectar points
  • 400 Nectar points = 250 Avios

Since 1 Nectar point is worth 0.5p at Sainsbury’s, Argos, eBay and other partners, what we are saying is that 250 Avios = £2, so 1 Avios = 0.8p.

This exchange rate is VERY attractive for Avios collectors

What I am intrigued to discover about this new partnership in the coming months is which way, overall, most points will move. Will Avios see a net inflow or a net outflow?

Will there be a net transfer of points into Avios from Nectar? Based on 400 Nectar points (£2) = 250 Avios, you are ‘buying’ Avios for 0.8p each. This is a decent deal.

If you have any Nectar points and you are serious about Avios, it makes sense to convert them rather than spend them with any other Nectar partner. It is difficult to pick up Avios for less than 0.8p.

On the other hand, will there be a net transfer of points from Avios into Nectar?

1 Avios now get you 0.8p of Sainsbury’s, Argos or eBay credit, amongst other partners.

A lot of Avios collectors – not necessarily HfP readers, who are savvier than the rest – will see value in moving their points across.

There are also likely to be a lot of Avios collectors who don’t see themselves flying anywhere for some time, or are in financial difficulty, and like the idea of cashing out for 0.8p.

Nectar Avios light

Does this new deal undermine almost all of BA’s non-flight Avios redemptions?

Er, yes. This is where I get a bit confused about the grand plan.

If you use your Avios for:

  • hotel redemptions
  • car hire redemptions
  • wine from Laithwaite’s
  • ‘experiences’
  • seat selection fees or
  • ‘Part Pay With Avios’

….. you get around 0.5p to 0.6p per Avios.

You would be crazy to redeem Avios for any of the things above, at 0.5p to 0.6p per point, when you could get 0.8p per point of pseudo-cash by converting to Nectar.

The whole ‘Part Pay With Avios’ strategy is now looking very messy.

Even some Avios flight redemptions don’t get you 0.8p

I have a spreadsheet of the last 7.7 million Avios I redeemed, from 2013 to today. I got – based on my personal value of the flights I took – an average of 1.2p per Avios.

Many people do far better than me, because I do a lot of Gold Priority Rewards for double Avios, and don’t always use a 2-4-1 BA Amex companion voucher.

A lot of people, probably not HfP readers, will do worse than me. As we have shown numerous times, redeeming for Economy flights can often mean getting 0.8p or worse per Avios. The only saving grace is flexibility, since Avios tickets can be refunded.

For these people, transferring Avios to Nectar is a better choice than redeeming for Economy flights.

How to convert BA Avios points to Nectar points

How does this change your credit card strategy?

Here is an example of how the convertibility between Nectar and Avios changes things.

American Express has a Nectar American Express card. See here, and read our Nectar Amex review here.

Nectar American Express

First year free and 20,000 points sign-up bonus – worth £100 or 12,500 Avios Read our full review

It works like this:

  • no fee for Year 1, £25 thereafter
  • 20,000 Nectar points (so 12,500 Avios) sign-up bonus
  • 2 Nectar points per £1 spent (so 1.25 Avios)

This card is now attractive. For the first year, it is a better deal than the free British Airways American Express card, which only earns 1 Avios per £1 spent and comes with a sign-up bonus of 5,000 Avios.

After Year 1, anyone spending over £10,000 on the free British Airways Amex may be better off with the Nectar Amex and its higher earning rate.

On the other hand …..

There are bound to be many people who are currently paying £25 per year for the Nectar American Express card. If they are spending under £10,000 per year on the card, they should cancel it and get a free British Airways American Express instead, converting the Avios to Nectar.

Here’s another quirk:

You can redeem American Express Membership Rewards points for Nectar points, at the transfer rate of 1:1.

This is now useless. You should transfer from Amex to Avios instead, at the transfer rate of 1:1, and then transfer your Avios to Nectar. This gets you a Membership Rewards to Nectar transfer rate of 1:1.6.

This means that you can turn your Membership Rewards points into pseudo-cash, spendable mainly at Sainsbury’s, eBay or Argos, for 0.8p per point. A lot of people will find this attractive.

How to convert BA Avios points to Nectar points

Any special Nectar redemption deal could encourage you to wipe out your Avios balance

In the PS. to Part 1, I showed you how the best use of Avios – bar none – is now redeeming 219 Avios (350 Nectar points) for any hot or iced drink, any size, at Caffe Nero.

At £3.30 for a Caramel Latte, for example, you are getting 1.51p per Avios.

More seriously, we have seen occasional offers in the past where eBay lets you redeem your Nectar points for twice the usual value – 1p per Nectar point.

If eBay did this again, you would get 1.6p per Avios if you turned them into eBay credit. A lot of Avios collectors would hit the ‘redeem’ button at that point.

It would trigger other moves too. I would be rushing to empty my American Express Membership Rewards points into Avios if I could get 1.6p per point at eBay. There isn’t much, at the end of the day, that you can’t buy on eBay – and these days most of it is brand new.

Sainsbury’s also runs an annual ‘double up’ promotion. This allows you to get 1p per Nectar point when you buy products in certain categories, up to a limit of 10,000 Nectar points (£100) per account.

It would make a huge amount of sense to convert 6,250 Avios into 10,000 Nectar points to get £100 to spend in Sainsbury’s during ‘Double Up’.

How to convert BA Avios points to Nectar points

There is a lot more to come

We have just scratched the surface here. Sainsbury’s Bank issues a range of Mastercard credit cards, for example. The sign-up offers can be generous and there is no annual fee.

Esso is a Nectar partner, so there is a new route to earning Avios from petrol. Sainsbury’s Energy often has ‘big bonus’ sign-up deals if you switch your fuel over.

We will cover all this over the coming weeks. In the short term, please don’t redeem any Avios for hotels, car hire, wine, seat selection or ‘Part Pay With Avios’, because transferring them to Nectar on Monday will get you 50% more value.


How to earn Avios points from UK credit cards

How to earn Avios from UK credit cards (October 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. Both have increased sign-up bonuses until 2nd November 2021:

British Airways BA Amex American Express card

British Airways American Express

10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

40,000 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 – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

60,000 points and an unbeatable set of travel benefits – for a fee Read our full review

The 30,000 points bonus on Amex Gold runs to 9th November 2021. The 60,000 points bonus on The Platinum Card runs to 2nd November 2021.

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:

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. This card has a limited time offer of 60,000 Avios when you sign up:

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

60,000 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.)

Comments (193)

  • Vit says:

    I should have taken nectar a bit more seriously from my ebay (et al.) shopping. 😐

  • Genghis says:

    Wow. I wasn’t expecting this.

    I think for us as we prefer to shop at Lidl and Tesco, this won’t do much for earning but the spending opportunities should be great. I’m sure other arb opportunities will become more apparent as we progress.

  • Will says:

    You make the grand assumption that we all want to spend 100k avios that is a lot of coffees. My take on this is that it will make it even harder to redeem on BA. That is the biggest problem facing long term collectors and Amex cardholders and makes a mockery of the principle reason for airmiles. BA should do more on that front. AA make it relatively easy to get downunder each way for 85k /115k AAdvantage in business /first and low taxes. Think how much more that costs in avios!

    • Will says:

      The answer is 185500 and 215500 on Cathay. Good luck finding on BA (for Amex voucher) unless you have fastdial to Tokyo desk and plan 355 days out! BA needs to add seats for points.

      • Phillip says:

        And that’s hoping that when you finally get through to Tokyo they don’t tell you that they only service Japanese accounts and you’d have to call BA U.K. during their opening hours!

        • Will says:

          one year i waited up for Tokyo, it was a Japan holiday and so then had to wait another hour for Hong Kong. at least i got 4xJ redemptions LHR-SYD (yes I know it’s usually 2 max, but there used to be a trick as seats were released both LHR-SYD and LHR-SIN-SYD)

  • Andrew says:

    So instead of 1000 MR points being worth £4.50 (on Plat) they are now worth £8 to spend at Sainsbury’s, Ebay or Argos? My head hearts already from reading these two articles!

  • Nick says:

    ‘Please don’t use in part pay with Avios’ should include an ‘…except at the lowest tier, which remains 1p per Avios’. I refuse to participate in the higher rate charade but there’s usually a £10 off for 1000 Avios or equivalent, which still beats Nectar.

  • Doc says:

    I assume filling up at Sainsburys petrol station become Avios earners now?

    • Super Secret Stuff says:

      Yep as I think they are run by Essex which earns you nectar points

    • The real John says:

      The rate is a lot worse than Tesco used to be. With Tesco debit card 4.8 avios per £1, sainsburys 0.625 avios per *litre* so around 0.55 avios per £

  • ChrisW says:

    12,500 Avios for a non-fee-first-year card is a great offer.

    • George K says:

      Problem is, most of us wouldn’t qualify as we hold other cards and would need to ditch the lot for 24 months…

  • Andrew says:

    I think this is a very timely move – travel is slipping down people’s priority list and so options to spend avios ‘on the ground’ will be attractive to many people.

    • Rob says:

      The problem (for Avios) is that it will have to pay a big chunk of cash to Nectar / Sainsbury’s every time someone does this. This is why I am a bit concerned that they have got it wrong.

      Tesco was a pure inflow of money to Avios. Yes, that sum had dropped a lot as Tesco made it harder to earn points, but it was still a one-way flow of money. This is a two-way flow. What happens if Avios actually sees a net OUTFLOW of cash, if more people move Avios to Nectar than in the other direction?

      • Andrew says:

        Agreed – short term it’s good for the consumer, longer term if this happens, it’s bad for Avios/BA and thus bad for the consumer. I know a few people with kids who shop at Sainsbury’s every week and so spend a fair bit I’m sure, but in their mind airmiles are something for people like me and not them – so BA need to change that mindset and say hey, you know those flights you were going to book to Spain in the summer – don’t go to Easyjet- book with your Nectar points with Avios.

        • Super Secret Stuff says:

          Funny thing is, I’m fairly sure you can either earn or spend points on Easyjet. So that could be interesting…

          • Super Secret Stuff says:

            Scrap that, think they’ve removed it. Very sensible to be honest…

          • Rob says:

            It went a couple of years ago. It used to be the only way of getting any sort of rebate on easyJet spend.

      • Super Secret Stuff says:

        I was wondering that, could be the start of the end for this one…

      • memesweeper says:

        Short-term there will be an outflow. People can’t fly, but previous frequent flyers, and card collectors, have big Avios balances.

        Long term … who knows. A holiday is a lot more aspirational than a trolley load of shopping.

        • AndyW says:

          Completely agree. For most people earning is aspirational and not ruled by common sense and ‘value’. I don’t see a flood of avios into Nectar in the long term.

          • Tim says:

            Agreed. There are a huge number of people (I have been one in the past), for whom the idea of getting a Club Europe flight for £25 (or now 50p) + “some” Avios is attractive, but who would never dream of spending hard cash on a Club Europe fare.

            Having become more aware of the cash-equivalent value of Avios (thanks HfP) I will now spend my Avios at Sainsbury’s and use the cash saved to buy a cash fare with BA or Easyjet or someone else.

            But here is the thing, I will buy the cheapest economy fare, I still regard paying cash for a business class flight as a waste of money. If lots of people have my approach, this could backfire on BA because they will be paying out real money for my groceries rather than filling empty seats on their flights, I will not be loyal to BA and will only fly with them if the competition is more expensive, and I will be buying on price rather than aspirational ideas of premium quality

      • YC says:

        At 0.8p Avios -> Nectar, avios outflow is not going to be huge. Maybe at the double up, makes it interesting but double up is capped and google says there are lots of exclusions on what you can use double up for. So overall i feel its going to be net transfers from Nectar -> Avios. Avios net cash inflow.

      • Dubious says:

        Perhaps that executive at Sainsbury’s is signing ‘we’re in the money!’ again…

      • Chris Heyes says:

        Rob I think it means an inevitable devaluation of Avios, maybe not immediately but very early 2022

        • Rob says:

          This would only accelerate Nectar transfers though. I think this makes Avios devaluations less likely.

          When Qatar did their massive devaluation in 2018, most smart people transferred to Accor and cashed out for hotel vouchers (pseudo cash) because the value of the miles dropped below the value of the vouchers. It went so badly that Qatar reversed the devaluation a couple of months ago.

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