Avios & Nectar merger – why it now pays to collect Avios

12 min Read Published: 16 Feb 2021

Avios & Nectar Merger - Why It Now Pays To Collect AviosFor years, Tesco & Avios had a solid partnership, where you could convert your Clubcard points to Avios. This has now been replaced with a Sainsbury’s offer, which should have pros and cons for everyone. Since 2020, it hasn’t made much sense to collect Avios points (unless you're saving for a blowout holiday). But now it makes total sense to collect them, whether you fly with British Airways or not. If you’ve already got a large stack of points collected from either Nectar or Avios just sitting in your account, it also means you have more options over how you spend your points. In this article, we provide all the information you need.

Avios & Nectar - What has changed?

The new scheme which launched on 25th January 2021 replaces the old partnership between Tesco Clubcard & Avios. This will mean that if you scan your Nectar card when shopping at Sainsbury’s, you can put those points towards free flights with Avios.

The bad news

Avios Nectar conversionLet’s start with some bad news. If you use your supermarket shopping to collect air miles, that won’t be as easy anymore. Unfortunately, the new offering with Sainsbury’s Nectar devalues how many Avios you can earn by shopping in store - by quite a lot. Previously, 250 Tesco Clubcard points would transfer to 250 Avios points - which equates to around a £250 spend to earn 250 points. Now with the new Nectar scheme, you need to earn 400 points to be able to transfer to 250 Avios points - around two thirds more than what you had to earn previously.

As mentioned in our article, "Which is the best supermarket loyalty card", to collect 1 Nectar point at Sainsbury’s, you need to spend £1. So to get the 400 points needed to transfer, that’s a £400 spend in store for 250 Avios. Obviously this isn’t a very good change; it’s almost double the spend for the same amount of Avios and you may have to change the supermarket that you regularly shop in.

The good news

It is not all doom and gloom for Avios collectors. Avios now lets you transfer points the other way, meaning you can transfer Avios points into Nectar points (something that wasn’t possible at Tesco). So if you weren’t looking to fly somewhere any time soon, you can now get money off your shopping instead.

The conversion is the same, just in reverse - so 250 Avios points gets you 400 Nectar points. This isn’t too bad, as Nectar rewards are generally quite low value and so it equates to £2 worth of points to spend on your shopping.

I’ve saved up 120,000 Avios points to use on free business class flights - so if I wanted to give up on the dream of getting away, I could transfer it and get £960 worth of Nectar points to spend on shopping. This would be a silly thing to do, as the redemption value is higher on business class flights - but it’s another option for my points.

Flying now earns you free shopping

You can now earn Avios to convert to money off your shopping at Sainsbury’s with Nectar, something to consider if you ever fly with British Airways or a One World partner (which includes American, Quantas, Cathay Pacific & more).

It is worth noting that you don't need to book a holiday directly with British Airways/British Airways Holidays to earn Avios points as you'll still earn points by booking a holiday package with Expedia.

If you were to book a return flight to New York in the cheapest economy class, you would earn just over 1,700 Avios points. After all the conversions - this would be worth around £14 worth of free shopping at Sainsbury’s.

Taking the above example further, the same flight in classic economy is worth £28, the lowest premium economy seat is worth £56 and the lowest business class seat equates to £82 off your Sainsbury's shopping. To top things off, if you’re flying with a spouse - they can have their own Avios account too, earning you double that amount when you fly.

It is probably worth everyone signing up for a British Airways Executive Club account in the off chance that you fly with them and earn Avios points. If you don’t save up enough for a free flight or upgrade, just get your weekly shop for free instead.

Although these amounts aren’t enough to retire on, it’s still a great bonus. Think of it like cashback that you claim for flying (which you can stack alongside your cashback credit cards and websites when booking).

What is the best way to use your Avios/Nectar points?

As things have changed so much as well as the fact that you have the option to switch Avios points back to Nectar, it’s tricky to say what the best use for your points is when you accumulate them.

By far the best use of Avios in terms of value is to save them up and use them on long haul Business Class flights, as trading in 100,000 points for something that costs £3,000+ gets you the best return. Just flying business class one way would take at least 50,000 Avios of collecting, however, which takes some time.

Doing some sums, if you saved up 100,000 Avios (enough for a return business class flight to New York), you’d get a £3,600 seat for around £600 after your points and fees, which works out at around £3,000 in value (3p per point). Transferring 250 Avios points into Nectar and spending on groceries will get you £2 in value for each batch. This works out at nearly a quarter the value (0.8p per point).

But this now comes down to your situation. Obviously, we can’t use these points to fly right now and it’s going to be hard to accumulate 50,000 or 100,000 Avios points to fly in style. So if you didn’t want to wait to use points you’ve accumulated, or don’t think you’ll earn enough for a business class flight to make it worth it, there’s nothing wrong with transferring to Nectar to get your groceries for free.

If you have a large amount of Avios points or are currently holding onto a British Airways Companion Voucher, then it’s still worth waiting for the time you can fly again as redemptions through BA are much better value.

British Airways AMEX credit cards

If you own a British Airways American Express Credit Card you’ll now have another way to spend the Avios points you’re earning. If you don’t own a British Airways credit card then check out our British Airways credit card review.

In summary, for every £1 you spend on the free British Airways American Express credit card, you earn 1 Avios point, which if you then decide to transfer to Nectar, is worth around 1.6 points (or 0.8p). The British Airways American Express premium credit card earns you 1.5 Avios points for every £1 spent, which equates you around 2.4 Nectar points (or 1.2p).

If your Avios points tally is fairly low, or if you’ve just spent a large portion and want to cash in the rest, then it’s a good option to transfer to Nectar. American Express provides welcome bonuses on its British Airways credit cards rewarding members with sign up bonuses of 5,000 and 25,000 Avios points respectively for the free and platinum cards. This would be worth £40 of Nectar points for the free card and £200 worth of Nectar points for the premium. Bear in mind however that the premium card has an annual fee of £195, which basically cancels out the higher total.

If it’s Nectar points you’re after though, you'd be better off signing up to the Nectar American Express card as you'll be rewarded with a Nectar points sign up bonus worth £100 and you'll only have to pay a £25 annual fee.

How to convert Nectar and Avios points

It is a fairly simple process to transfer Nectar points to Avios and vice versa. You’ll need to link your accounts on either the Nectar website or British Airways Executive Club, depending on which way you’d like to convert. You can sign up to both Nectar and British Airways loyalty clubs online if you’re not a member of either and transfer over points which way you need.

Conclusion

Although it is now significantly more difficult to earn Avios points on your weekly shopping, the option of converting your Avios points to get money off your groceries should be a welcome bonus to everyone. It’s worth checking if you have any old British Airways accounts that may have earned points from previous trips as you should be able to transfer them straight over and get some free shopping. Make sure to remember this added bonus when we are all able to fly again in the future, food always tastes better when it’s free.

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