Three quarters of people don’t know the rules on joint bank accounts

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Research for SavvyWoman and M&S Bank has found that three quarters of people don’t know the rules on joint bank accounts. And almost 90% of people would like clearer information from their bank when they open a joint account.

Joint bank accounts – the research

The research, carried out by CensusWide found that there’s widespread confusion about the rules on joint bank accounts. This could mean some couples are leaving themselves potentially exposed to debts they’re not aware of.

Here’s what the research found:

When asked ‘who is responsible for paying off debts on a joint bank account?’

  • Three quarters (74.1 per cent) don’t know that each person is liable to pay the entire debt on a joint account, and that the bank may pursue either for the full amount.
  • Almost half (46 per cent) wrongly think that if they split up with a partner and there is a debt on the account, each person is only liable to pay half the debt.
  • Over one in ten (11.9 per cent) incorrectly think that only the person who runs up the debt is responsible for paying it.
  • Almost one in six (15.6 per cent) don’t know who is liable to repay a debt on a joint account.
  • Only 25.9% got the right answer.

The study also asked couples who had a joint bank account whether they read the terms and conditions in full.

  • Over four in ten (42.3%) said they didn’t fully read the terms and conditions when they opened their joint account.
  • More women than men said they read the Ts and Cs in full – 61.4% of women compared to 57.8% of men.

The research company also asked people whether they thought both partners’ permission was needed to operate the account:

  • Four in ten (40.8 per cent) don’t know or wrongly think that they need the approval of both parties to use a cash machine.
  • Seven in ten (70.1 per cent) don’t know or wrongly think that you need the approval of both parties to set up arranged overdrafts.
  • Five in ten (49.2 per cent) don’t know or wrongly think you need the approval of both parties to write cheques.
  • Almost five in ten (47.2 per cent) don’t know or incorrectly think that you need the approval of both parties to make cash withdrawals.

In fact, only one partner needs to agree to any of the above.

Paying off debts on joint bank accounts

The research company also found that almost one in five people (18%) who’ve split up from a partner in the past have had to pay off an ex partner or ex spouse’s debt on a joint bank account.

What we want the banks to do

We want all the banks to produce a one page summary of your rights and responsibilities if you open a joint account. I don’t think it’s right that most of the banks include information about your responsibilities (specifically, that you each are liable to pay off any debt on a joint account), within a booklet that could run to 40 or even 60 pages.

We are going to campaign to get all banks to do their bit to make joint accounts clearer so couples know exactly what they’re agreeing to.

M&S Bank, which we worked on this project with, is one of only two of the big current account providers (Co-op Bank is the other) that provides a one page document summary of the key parts of the terms and conditions for couples opening a joint account. Sue Fox, chief executive of M&S Bank, said: “We want to ensure we’re providing the necessary education for couples up-front before they open a joint account, and provide support should the relationship break down.”

“We believe that customers should be treated as individuals so, while many current account providers will simply block a joint account once they’ve been notified of a separation, we will speak to both parties to ensure we understand the situation and offer a bespoke solution to meet their circumstances.”

As a result of the research project M&S Bank did with us, they are keen to ensure that couples better understand the financial link they’re making with their partner from the outset, such as linked credit reports.

Why we did the research

I’ve campaigned about the issue of joint bank accounts before and it’s something I feel really strongly about. We approached M&S Bank and they were keen to get involved, not least because they realised what an important issue this was for their customers. The research was carried out by an independent research company, CensusWide.

FULL DISCLOSURE: We approached M&S Bank to undertake this project jointly and M&S Bank paid us to be part of this project.  The money we received enabled us to ask more questions (via CensusWide) than we would have been able to do on our own. This has given us a greater understanding of what couples do and don’t know about joint accounts. I am also delighted that, as a result of the research, M&S Bank is looking even more closely at the information couples who open joint accounts are given. Neither SavvyWoman or I am being paid to advertise M&S Bank, to link to their website or promote M&S Bank’s products.

Related articles:

How to protect your finances if you have joint accounts and split with your partner

Linked credit files; how to get your partner’s details off your credit file

Buying a property jointly; how to own your property if you buy with someone else

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