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Halifax Rewards changing soon – is it worth bagging the new deal?

Halifax Rewards changing soon – is it worth bagging the new deal?

Halifax is overhauling its popular Reward current account from 1 June 2020, boosting rewards if you can jump through some hoops, including having to tell it which reward you want in advance. But despite the better perks, many will actually be better off switching – read on to find out why.

The Halifax Reward account is currently fee-free and offers a £2/mth reward each month you pay in at least £750, pay out two or more direct debits and stay in credit. From 1 June, the cash you can earn with the account is going up, but Halifax is adding a £3/month fee for some and making the criteria for getting the rewards tougher.

If you're an existing Rewards customer and you opened your account before 13 March 2020, you have to sign up by this Friday if you want the new rewards – do nothing and you'll instead be automatically downgraded to a new fee-free current account offering no perks. If you opened your Rewards account after 13 March, you have until 12 June to decide whether to opt-in. 

Here's a rundown of the changes:

  • There's a £3/mth fee for some, but you can avoid it. Halifax is temporarily waiving the fee until the end of August. After that, you can still avoid it if you pay in at least £1,500 a month (which equates to a £21,300 annual salary).

  • The rewards are getting better – but they'll also be harder to get. Once a year, customers will be able to choose whether to get a monthly £5 cash reward or instead choose digital magazine subscriptions, online movie rentals or cinema tickets and popcorn vouchers (full details below).

    But to get ANY rewards, you'll need to pay in £1,500/mth and stay in credit. Plus you'll either need to spend at least £500/mth on your debit card OR keep at least £5,000 in your account (you won't get any interest on this). Importantly, you'll need to pick which of these criteria you will meet – either debit card spend or minimum account balance – ahead of time, and won't be able to change this until the following year.

The overhauled account will be available to new customers from 1 June. If you're an existing customer and you opt in, you'll get the new features from 1 June or 1 July (depending on when you first opened your account).

Compare the best bank accounts using our guide.

I already have the Halifax Reward account – what happens next?

If you currently have a Halifax Reward account, you WON'T automatically get the new rewards. Instead, you have until Friday 15 May to decide if you want to sign up, which you can do by calling 0345 129 9744 or 0113 369 7744 (though make sure the account is still right for you first – more on this below). Note: if you opened your Reward account after 13 March 2020 you have until 12 June 2020 to opt in to the new version.

If you don't want to, or you do nothing, your account will automatically be converted into a regular Halifax current account which has no fee – or perks.

What are the new 'lifestyle benefits' on offer?

Those with the new-look Halifax Reward account will be offered the choice of a £5/mth cash reward or one of the  following 'lifestyle benefits' each month:

  • Three digital magazines from the following selection: Cosmopolitan, Country Life, Elle, Elle Decoration, Esquire, Good Housekeeping, Harper's Bazaar, House Beautiful, Men's Health, Prima, Red, Runner's World and Women's Health. When we checked we found these typically cost about £20/year – so three magazines would together cost around £5/mth.

  • Two digital movie rentals from Rakuten TV. We found these typically cost about £5 each.

  • One free Vue cinema ticket (which we found typically cost £5-£15, depending on which cinema you go to and when) and a half-price popcorn voucher. Of course, you won't be able to use these now, but you should be able to use them once cinemas reopen as they're valid for 12 months after being issued.

Once you choose a reward, it's fixed for the next 12 months and you can't change it during this time.

Is the new Halifax Reward account worth it?

While it wasn't one of our top picks, the Halifax Reward account offered a relatively straightforward way to earn a free £2/mth from your bank.

Though it's now possible to earn more, the changes to the criteria for getting a reward mean you're likely to be better off switching. That's because you can easily match – or beat – the £5/mth reward elsewhere:

  • Get up to £15/mth cashback on household bills. If you want a current account that pays you, our current top-pick is the Santander 123 Lite* account, which has a £1/mth fee but offers up to £15/mth cashback on household bills – if you meet its criteria. 

    The 123 Lite account pays 3% cashback on phone, broadband, mobile and TV bills, 2% on gas and electricity, Santander home insurance and life protection, and 1% on water, council tax and Santander mortgages. All bills need to be paid by direct debit and cashback is capped to £5/mth in each tier (so max £15/mth).

    To get cashback, you need to pay in £500+/mth (versus £1,500+ on the Halifax account), have two active direct debits, pay your monthly fee and log in to online or mobile banking at least once every three months.

    So unless you've small bills (or you really like the cinema), you could earn more by switching to the 123 Lite account. And you can combine this with the options below.

  • Earn £5/mth in interest from easy-access savings. If you would look to qualify for the reward by keeping £5,000 in the Halifax account, you can get the same amount in interest with a top easy-access savings account. And if your balance dips below £5,000, you'll still get interest on the remainder (whereas you'll get nothing with the Halifax account). Or, if you know you won't need to access the money at all, you can boost returns with a one-year fixed savings account.

  • Get up to 5% cashback on all spending via top rewards credit card. If you would look to qualify for the Halifax reward by spending over £500/mth, a cashback credit card could earn you more – with the added benefit that you'll still get some cashback if you happen to spend less in a particular month.

    The top fee-free card is currently the Amex Platinum Everyday, which gives 5% cashback on the first £2,000 of spending in the first six months, 0.5% on the next £3,000 you spend in your first year, and 1% on any spending above this. For full info and more options, see our Credit Card Rewards guide.

  • Big film fan? The Halifax Reward account could still win. Provided you'll make use of them, the 'lifestyle benefits' on the Halifax account could be worth it, particularly for regular filmgoers. For example, if you go to a Vue cinema in central London each month (when these reopen) and can claim a £15 cinema ticket plus discounted popcorn, your total gain could be much higher than the £5/mth cash reward. But you'll need to be completely sure that you can meet the criteria for getting the reward and that you'll use the benefits before signing up.