Avios To Nectar Conversions Devalued Again!

British Airways has announced that Avios to Nectar Conversions are being devalued AGAIN from the current 300 Avios converting into 400 Avios. What started off as a great deal when it was implemented in early 2021 (it gave Avios a new minimum floor value of 0.8p) the value has slowly been chipped away in two devaluations. In November 2022 the conversion rate dropped from giving 0.8p worth of Nectar points per Avios point to 0.67p and now from the 11th of March 2024 it drops again to only 0.5p worth of Nectar points per Avios point.

It’s important to note that this devaluation only applies to Avios to Nectar transfers and NOT Nectar to Avios transfers.

What rate will I get making Avios to Nectar Conversions in the future?

From the 11th of March, the new Avios to Nectar Conversion Rate is 400 Avios Points to 400 Nectar Points. This is a downgrade from the previous conversion rate of 300 Avios Points to 400 Nectar Points. This equates to a 0.17p drop of value from 0.67p an Avios point to 0.5p. A fairly chunk 0.3p loss from when Avios to Nectar conversions were first introduced!

The exchange rate of Nectar points remains unchanged with 400 Nectar still transferring into 250 Avios which means in effect you are still ‘buying’ Avios at 0.8p. You will lose 37.5% of the value of your points if you end up moving your Avios to Nectar and then back again.

This rate change also removes the option to get outsized value by converting Amex Membership Reward points to Avios and then Nectar. Now if you want to convert your Membership Reward points into Nectar you may as well do this directly as the exchange rate is now the same.

Why has it changed?

This is obviously down to the BA/Avios rather than Nectar. With BA increasing ‘taxes + fees’ on long-haul business flights to close to £1,000, and the ongoing cost of living crisis it’s clear that many Avios holders are still opting to cash out their Avios for 0.67p a point with Nectar. Particularly with the current economic situation £670 (soon to be £500) worth of shopping is a lot more attractive to many than using 100,000 Avios + almost £1,000 in ‘taxes & fees’ on a flight. In addition to this rather than ‘fight’ for reward seat availability people preferred to convert their Avios into Nectar points and pocket the cash saving off their shopping. This gave them a lump sum of cash they could then use with any airline without having to worry about reward availability.

The second reason why this change might have happened is whilst the conversion rate remained at 250 Avios to 400 Nectar points (0.8p per Avios point) there was a limit to how much BA could ‘tinker’ or attempt to make the scheme less valuable. Any significant negative change and then they would just send the masses to convert into Nectar points costing them a small fortune. The decrease in value again to just 0.5p per Avios point gives BA/Avios a lot more tinker room in what they can do to the scheme… This leads to our next point…

What should I do?

If you are planning to convert Avios to Nectar you should do so NOW, or at least before the 11th of March! Make sure you are certain you want to do this because if you transfer into Nectar to later transfer back you will lose

50,000 Avios is the monthly manual transfer limit. If you transferred 50,000 today it will net you 66,666 Nectar points worth £333. If you want to convert back you’d get 41,666 Avios a loss of almost 9,000 Avios. If you converted 50,000 Avios after the 11th of March you’d receive 50,000 Nectar points worth £250. If you converted back to Avios you’d receive 31,250 Avios a huge drop of almost 19,000 Avios. Remember when the partnership was first announced 50,000 Avios would get you 80,000 Nectar worth £400 and lossless conversions in both directions…

You can transfer your Avios into Nectar points here – https://exchange.shopping.ba.com/partner/nectar

Conclusion

Unfortunately now the partnership is very ‘ordinary’ with the minimum floor value of Avios decreasing a further 0.17p to 0.5p (which is now no different from any other pseudo-cash option.) If you were on the fence about transferring some Avios points to Nectar you might want to take action sooner than later to lock 0.67p worth of value per point.