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How to earn Avios from Barclays Premier via savings WITHOUT switching banks

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I am spending some time over the Bank Holiday weekend looking again at the new Barclays Premier and Barclays Avios Rewards partnership, so you can see if it is worth signing up. Our main introductory article is here.

You can open a Barclays Premier account online and there is a 25,000 Avios bonus for signing up. You will earn 43,000 Avios in total during your first year, and a British Airways upgrade voucher for every 12 months that you retain your account.

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.

Earn Avios from Barclays Avios Rewards and Barclays Premier

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 may 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, according to Finder, the current Premier ‘exclusive’ is a 2-year flexible bond paying 0.45%.

There is also a two-year fixed rate cash ISA paying 0.55%. 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.

These rates can clearly be beaten elsewhere, so you need to treat the interest differential as as additional cost for getting access to Barclays Avios Rewards. Whether this makes sense or not depends on the value you place on the Barclays upgrade voucehr and the broader value you get from being able to access Barclays Premier.

Barclays also has the usual range of ‘open to all’ 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.

Last year I sat down with the Barclays Premier 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:

  • Click one of the Barclays Premier ads on HfP to open an account. Once you state that your income is below £75,000, you will be down-sold to a standard Barclays current 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.

Earn Avios from Barclays Avios Rewards and Barclays Premier

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.

  • Click one of the Barclays Premier ads on HfP to open an 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 introductory HfP article which outlines Barclays Avios Rewards in detail.

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.

Comments (26)

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

  • Mouse says:

    “ 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.”

    Disappointing that you’re prepared to parrot this garbage. It’s true that in-branch services have been cut back horrendously but by this point it’s clearly just cost saving and nothing to do with covid.

    • Leo says:

      Well Rob can only report what Barclays said to him….but yes I agree with your sentiments about Barclays, my once large branch has now become an ATM with a bewildered and unhelpful member of staff in the lobby. It reminds one of a lock up garage. Last time I went the staff member couldn’t even tell me where the nearest full service branch was. This is NW3 by the way, not some rural idyl.

      • Ls says:

        No. Stop being an apologist. This is a journalistic website, and can critically appraise the information given to it.

        • jeff77 says:

          This is Barclays though. The most perfectest bank ever and anything that goes wrong must be the customer’s fault

  • AFKAE says:

    As Rob indicates, hopelessly uncompetitive rates. You can get 1.5% on instant access with Chase saver account.

    • masaccio says:

      Having £100k in a cash account must be a pretty small customer niche

    • jeff77 says:

      £100k @ 0.55% = £550 tax free if fixing for 2 years
      Avios @ 0.08p = £344
      Minus £144 annual fee = net gain of £750

      Chase= £1500 of interest. Anything above £500 gets taxed at 40% for higher rate taxpayers, so net interest of £1100.

      Anyone earning above £150k would get post tax interest of £900 from chase

      You don’t need to lock in anything for two years with chase either.

      Not sure why anyone would fix a rate now given that it’s obvious to anyone (well anyone with the brain capacity of more than a dung beetle) that interest rates will be going up.

      My HSBC non fixed rate isa has already gone up from 0.25% to 0.45% in the last month.

      0.55% fixed is so so bad.

      Depends how much value you place on the voucher I suppose.

      • Rob Collin says:

        Chase’s Easy access is 1.5%, but the best 1 year fix is 2.1% (via Flagstone) and 2 year fix is 2.4% (via Atom). It’s not as straightforward a decision as you state.

        • jeff77 says:

          Chase is just an example. The point is the Barclays rates are diabolically bad and some context on that should be provided so people make an informed decision

          • Rob says:

            If you’ve got £100k in spare cash you’ve presumably got the ability to work out the exact numbers based on your tax position.

            You’d be paying 45% tax on your interest income, realistically, remember so the gap is less than you think.

          • jeff77 says:

            “ so the gap is less than you think.”

            Not really as I’ve done my calculations with tax as shown above

          • Rob says:

            This also gets you into Barclays Premier if you wouldn’t qualify normally (eg retired) which skews the calculations for some.

            As interest rates rise, the ‘stocks and shares’ option may become ‘cheaper’ than moving cash savings into Barclays, depending on the Barclays investment fees vs lower cost options.

      • RussellH says:

        > obvious to anyone that interest rates will be going up.

        ARE going up. I have already lost count of the number of e-mails I have had from Buliding Societies and so-called second tier savings banks advising me of interest rate rises. Some banks sent me two, maybe three such e-mails in April.

  • Jon says:

    Before I switched to AJ Bell, Barclays trading platform didn’t suck so there is that. The mere mention of visiting a branch though reminds me of why I switched from Santander to First Direct. Whenever a bank has the customer service fallback of a branch, you can be sure their online/telephone service will fall short somehow and you will be asked to “pop into a branch” as if that is convenient to everyone

  • masaccio says:

    Don’t you need to use the current account switching service to get the 25,000 bonus? That’s what the linked HfP article says and switching my current account to Barclays isn’t worth 25,000 Avios for me

  • gl says:

    What about paying in c.£6k per month from another account then transferring out? Anyone know if that would count?

    • ChasP says:

      Probably would but you are required to declare an income of £75k which might not tally with information from other sources and lead to questions

    • blue_wolf says:

      Wouldn’t need to be anywhere near £6k either, £75k salary is more like £3.7k, £3.8k take-home per month after tax, student loans, pension etc. Barclays would only see the net amount that lands in your account.

  • dougzz99 says:

    Not sure what is Premium about either Barclays or HSBC service. I have both and wouldn’t even consider moving my real banking to them. The service from both is very poor.
    The products they offer may meet a particular requirement you have, earn Avios/points of some sort, maybe travel insurance, but premium banking is not on offer.

    • Axel Heyst says:

      Dont disagree with your comment. This article is very niche.

      Dougie I also don’t want to dissapoint you but even “Premium banking” is not up too much.

      The only benefit to Jade HSBC I have is HSBC don’t question why I transfer circa 8 times a month £10k through their credit card through Curve.

      • Rob says:

        Jade is hopeless, I can’t argue with that. It is a little surreal – you don’t even get a Christmas card for having £1m sitting in your account. You’re also still restricted to moving £10,000 per day via the app.

  • Nick says:

    Or you could open a basic account and switch that, without having to accept a crap interest rate from Barclays. Would take no more than 5-10 mins, particularly with one of the banks that has worked out how actually to do verifications remotely.

  • Nick says:

    This is terrible advice. The sums in no way stack up if you ignore referral payments.

    And if you’re after great customer service for banking, you’re not with HSBC Premier – you’ve picked Starling, Monzo, First Direct, Metro etc.

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

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