Avios to Nectar Conversion Rate Devalued!

British Airways has announced that the Avios to Nectar Conversion Rate is being devalued from the current 250 Avios to 400 Nectar Point rate. This was a great deal when it was first implemented in early 2021 as it gave Avios a new higher ‘minimum’ value of 0.8p once converted into Nectar points. The new conversion rate sees an almost 20% drop in value. It’s important to note that this devaluation only applies to Avios to Nectar transfers and NOT Nectar to Avios transfers. This means you will no longer have the ability to change between Avios/Nectar points without any loss of value.

What is the new Avios to Nectar Conversion Rate?

From the 16th of November, the new Avios to Nectar Conversion Rate is 300 Avios Points to 400 Nectar Points. This is a downgrade from the previous conversion rate of 250 Avios Points to 400 Nectar Points. This equates to a 0.13p drop of value from 0.8p an Avios point to 0.67p.

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 and will lose value if you are transferring to Nectar and then back to Avios later.

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 it’s clear that many Avios holders were opting to cash out their Avios for 0.8p a point with Nectar. Particularly with the current economic situation £800 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 gives BA/Avios more tinker room in what they can do to the scheme… This leads to our next point…

Is there anything I can do to minimise the risk from the upcoming Avios to Nectar Conversion Rate changes?

If you believe this change is to do with some upcoming Avios devaluation and you have 75,000 Avios in your British Airways account and you are able to, transfer them to Nectar. Why 75,000 Avios? Because it’s the maximum amount you can transfer before the changes come into effect (depending of course on how much you’ve already used of these limits.)

50,000 Avios is the monthly manual transfer limit
25,000 Avios is the quarterly automatic transfer limit.

With the Nectar to Avios transfer rate remaining unchanged this is a good FREE ‘insurance policy’ locking in 0.8p worth of value per Avios. You can then after the changes, if you wish, transfer back to Avios without any loss.

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

Conclusion

Unfortunately, this change takes away the simplicity of the scheme. It was extremely easy to explain to other people that you could interchange between the two as and when you required. With these changes, not only are transfers to Nectar less attractive due to only getting 0.67p an Avios point but if you transfer back into Avios you’ll lose approximately 20% of the original Avios you had. If you were on the fence about transferring some Avios points to Nectar you might want to take action sooner than later to lock 0.8p worth of value per point.