A new fee and new rewards make this account a very different proposition. Should you ditch it?
When the bank switching service first came into play back in 2013 I moved over from my ancient Barclays account to the Halifax Reward account.
Not only did I get a nice £100 bonus I also got £5 a month, every single month. That dropped to £3 a month, then £2 a month. I’ve kept it just because it was earning a little bit of cash every year – but it’s not one I’ve recommended for a while now.
Well, from the 1st June 2020 it’s going to change again. Halifax has started contacting customers with details of the new Reward accounts (thanks to fellow money blogger Or Goren from Cordbusters.co.uk for giving me a heads up).
A new monthly fee
The Reward account will begin to start charging a £3 monthly fee, meaning it’ll cost you £36 a year. This isn’t unusual – many current accounts with benefits have a similar charge, including Barclays Blue Rewards, Natwest Reward and Santander 123.
However you won’t pay the fee if you pay in £1,500 every month. Most people should be ok with this if they pay their salary in – you need to earn just under £22,000 a year to take home this amount after tax and National Insurance.
The £2 monthly reward will be replaced by something called Reward Extras. To be eligible for this you’ll need to either spend £500 a month on your debit card or keep £5,000 in the account every day of the month.
You need to pay in the £1,500 a month every month to get your reward (which you should be doing to avoid the fee), and you need to stay in credit.
If you do either of these you then get to pick a reward. These are:
- Three digital magazines a month from a selection of Hearst magazine titles (eg Good Housekeeping, Red)
- Two HD digital movie rentals from Rakuten
- One Vue cinema ticket a month
- £5 a month
The offer you choose is fixed for at least 12 months, so you can’t mix and match throughout the year. You can choose a new reward at the start of each year.
Are the new rewards any good?
I’ll look at each benefit in turn:
£5 monthly reward
Well on the surface the offer seems good. £5 a month is better than the current £2 a month, as long as you are avoiding that monthly fee.
However you need to factor in the new requirements that mean you either need to spend or save a lot of money each month with Halifax.
So if you spend £500 a month you’ll earn £60 a year (if you take the cash option). Compare this spend to using a cashback card and it’s the equivalent of 1% back – so no real difference to using the top American Express cashback cards.
The alternative option of £5,000 a month in your account for the same reward, isn’t any better. Do this for a year and it’s the same return as putting that money in a 1.2% savings account.
With news of the interest rate cut that could end up being quite healthy in comparison to others, but right now you can still beat that. And you’d need to have £5,000 in savings, which we know many people don’t.
So ultimately you can get the same or better than this elsewhere.
It’s also worth noting that if you are a higher rate taxpayer you’ll be liable to pay extra tax on this bonus.
Free cinema ticket
Vue cinema tickets can vary between a fiver through to well over a tenner – it all depends on where you live.
Now if you have an expensive Vue cinema near you and go once a month then the return starts to look a lot better. Say your tickets are £10 that’s an annual reward worth £120. If tickets are £12 it’s worth £144. It’s likely the highest paying reward after you factor in the £60 you’d not be earning in cashback or savings if your money was elsewhere.
The code you’ll get each month can also be used for more expensive 3D screenings too, increasing the value (though I’m not a fan). It’s possible you might be able to combine it with other offers and savings too.
Even so it’s possible to save on cinema tickets in lots of different ways, such as 2-for-1 tickets with Meerkat Movies, and deals like this could work out as a better option. Here’s my guide to the best ways to save at the cinema.
Digital movie rentals
The vouchers will be worth £4.50 to use on Rakuten, which is enough for most HD films (occasionally some are £4.99). So you’ll be getting £9 back from your account. That means it’s got a true value to you of an additional £48 a year (that’s the £108 a year minus the £60 your money could be earning elsewhere).
I think that makes this a decent offer if you regularly watch two new release HD movies a month.
If you don’t, or already have something like Sky Cinema, then it’s not worth it.
It’s worth remembering too that you can also often get free or cheap rentals from time to time in other ways (which I’ll share here). For example, Amazon often runs £1.99 rentals for Prime customers, while Chili has 99p selections.
The vouchers are valid for 35 days, and once you choose your film you’ve 48 hours to watch your film.
It’s not clear which titles you can pick from, but seeing as it’s Hearst you get the magazine from it’s likely to be one of these options.
Your picks will be digital-only, so you’ll need a tablet or computer to read them. It looks like the three magazines you choose at the start of the year will be the same ones you’ll get all year.
Personally I’d check first what magazines you can get for free from your local library.
Should you get it / stick with it?
I think that if you’d only go for the cash reward there are better choices out there. In fact any account that’ll give you a switching bonus will be worth taking advantage of. I’ve got a regularly updated list of the different offers here.
Andy I don’t think the magazine offer is that good either thanks to the alternatives
However, the cinema and movie rental options could be worth looking at if you are already spending this money on those services.
Personally, I’m not sure it’s worth using the Halifax debit card over my cashback credit cards to get any of these deals – which could mean I completely ditch my Halifax account.
What do you need to do?
If you want to make the change you’ll need to let Halifax know by 15th May 2020. You need to all them on 0345 129 9733.
If you don’t do this, you’ll automatically be moved to a standard current account on 1st June 2020. If this happens your account number and sort code will stay the same, you’ll just be on the basic free account.
Any one who decides they don’t want to keep it should take advantage of bank switching offers elsewhere to get some free cash and potentially other rewards on top.