Why having a joint bank account with your partner could be BAD for your finances

Having a joint bank account with your partner can be a convenient way to manage any bills or finances you share together.

But there can be risks involved – and it’s important to know exactly what you’re signing up to.

As today is Valentine’s Day, we’ve rounded up everything you need to know if you’re managing your finances as a couple.

It comes as new research from F&C Investment Trust shows half of UK couples (51%) don’t share a bank account.

Almost a third of UK adults (30%) said they prefer to keep their finances separate, while half of these (49%) do so to remain financially independent.

But again, it is all down to what works best for you, as a couple.

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Joint bank accounts – the pros and cons

Joint bank accounts are normally set up by couples as a way to share money and more easily manage day-to-day living costs.

The main plus side is that it can make splitting bills easier and for some couples, it works really well for them.

If you’re considering opening a joint bank account, have an open discussion first to check you’re both on the same page.

Don’t feel pressured into it – as there are disadvantages you need to think about.

When you open a joint account with someone, you become financially tied – this can be a problem if one of you has a bad credit history.

You become “co-linked” if you have a joint bank account which means your credit ratings will become linked.

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Living with someone or being married doesn’t have an affect on your credit score.

If the account goes overdrawn, you’re also both responsible for that debt – so keep this in mind if one of you is bad with money.

Another thing to be aware of is, if one person takes money out of the joint bank account, it can be hard to get it back.

Some joint bank accounts require both people to sign to access the funds.

You can ask your bank to set up the account so that both of you have to agree to any money being withdrawn, or to freeze it.

Finally, if things go wrong and you end up splitting up, you’ll normally both need to give permission for the bank to close the account.

This can be awkward if you didn’t end on amicable terms. You also won’t be able to close an account until any overdraft has been paid off.

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If you close a joint account, you should let the major credit reference agencies know so they can issue a “notice of disassociation” so you’re no longer financially tied.

Lucinda O’Brien, savings expert at Money.co.uk, said: “Before you decide to have a joint account together, it's important to recognise the financial and legal repercussions of doing this.

“If you’re struggling to come to an agreement with your partner, you may want to consider drawing up a contract or seeking advice from a financial advisor, so you both know what your position is if something were to go wrong in your relationship.

“Alternatively, if a joint account isn't for you or your partner then there are various apps such as Splitwise that’ll help make sharing expenses easier for the both of you.”

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