Over 40% of couples have a joint account, but are there advantages to keeping your money separate?

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Many couples open a joint account when they get married, but among those who live together, it’s less clear-cut. Research shows that 46% of men and 40% of women say they have a joint account with their partner. What are the disadvantages?

What is a joint account?
A joint account gives more than one person access to the money in it. If you open a joint account with your husband or partner, it will be set up so either of you can take out money and pay bills without the other having to sign or agree to it. So far, so straightforward. The bad news is:

  • Each of you is responsible for any debts on the account (not just half or debts you’ve run up individually).
  • Joint accounts can be hard to freeze or close down quickly if you break up acrimoniously.

Joint accounts
You may like the idea of mixing your money together or you may prefer to keep some of your money separate. It’s important to think of both the practical and emotional implications of having a joint account.

Advantages:

1. You both know exactly what’s going on

2. It’s easier to pay bills; you don’t have to juggle accounts

3. You can share responsibility for the finances more easily

Disadvantages:

1. Your partner may expect you to justify what you spend

2. You’re each responsible for all the debts that either of you run up on a joint account. If your partner won’t pay up, your credit rating could be damaged.

SAVVY TIP: The terms and conditions on joint accounts vary from bank to bank; particularly in relation to what happens if you want to close or freeze a joint account. Check your bank’s approach (and get details in writing) before you open a joint account.

Separate accounts
A friend of mine still keeps her money separate from her husband’s, even though they’ve been married for several years. They’re completely open about their finances, they just prefer it that way. Although most couples pool their money at some point, if you or your partner had a bad experience from a previous relationship, you may prefer to keep your money in separate accounts.

Advantages:

1. You can keep your financial independence

2. You are only responsible for debts that you’ve incurred on your own account

3. You might find it easier to keep on top of your own finances because you won’t each assume the other is making all the decisions.

Disadvantages:

1. It’s easier to keep secrets, which can lead to problems

2. You can end up juggling several different accounts, which can be hard to keep track of

Joint and separate accounts
An increasing number of couples open a joint account while keeping their existing individuals accounts open as well.

Advantages:
1. You can keep some of your ‘own’ money to spend on exactly what you want (including surprises and presents for your partner without feeling like he or she paid for them)

2. You can still pay all your household bills from your joint account, which can be easier to manage

Disadvantages:

1. You may have different ideas about what the joint account should be used for. It’s worth sorting that out upfront as it could lead to arguments later on.

Useful links:

You can download a leaflet called you and your joint account at the British Bankers’ Association website (the download button is towards the bottom of the page).

Related articles:

Joint bank accounts; a foolproof guide

Can a ‘living together’ agreement protect your finances?

Your rights if you have a second card on your credit card account

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