Once you’ve got to the point in a relationship where you start to build a life together, it’s only natural to want to merge your finances – and a joint bank account can be a great way to do this.
What are the benefits of a joint bank account?
Two or more people can have access to a joint bank account, so you can pool your money together in one place. Each account holder is able to pay into the account, arrange to pay bills, write cheques and withdraw cash. But because of this, you have to have absolute trust with the other person.
A joint account will let you have one place where you can share your money and manage your expenses. So it’ll make life easier when it comes to paying your rent or mortgage payments as well as any other household bills. Budgeting for food and other shared expenses should become much simpler too, as well as saving for big expenses like a holiday.
You don’t have to put all of your money in the account either, you can continue to have a separate bank account for your personal spending alongside the joint account that you have with your partner. But it would be a good idea to agree in advance how much you’re going to pay in each month, as well as what you’re going to do with any money that’s leftover.
Things to consider
Setting up a joint account with someone will create a financial link between you both. So future credit checks on either one of you will incorporate the other person’s credit history. To make sure that you’re both aware of each other’s credit past, it might be wise to have a conversation about this beforehand.
While you’re having this chat, you could discuss what you would do with the account in the event of a break up. Again, this is not going to be a pleasant conversation but setting this out now could help to make for a smooth transition later on in life. As part of this, you should discuss what you’ll do about Direct Debits or standing orders in the event of a split and try to come to an agreement over how you’ll pay an overdraft, if you have one. Make a note of what you decide to agree on.
“Jointly and severally liable”
With a joint account you are “jointly and severally liable” for any transactions. It’s a nasty piece of banking jargon – but it can have a big impact. What it means is that if you and your partner open an account together you are BOTH liable for any debts on the account. So if your partner was to run up a £1,000 overdraft without you knowing then do a runner the bank would be totally within its rights to chase you for the whole amount.
The joint thinkmoney Personal Account
If you’re married or have got a partner, you can apply for the joint thinkmoney Personal Account. The account has a monthly management fee of £21.25, and if you want to read more about the account, click here.