Joint bank accounts

A joint account lets you manage any money you share with someone else. This is most likely to be your partner, but could also be a housemate – or anyone else. It’s convenient for shared costs, but there are always risks to giving other people control of a single account.

What is a joint bank account?

A joint bank account is an account in the name of two or more people. Everyone named on the account is able to pay money in or take it out – although sometimes more than one person needs to agree to this.

Joint accounts are mostly used by:

  • married couples, civil partners and couples who live together
  • housemates who have shared expenses – like rent and bills.

Joint accounts aren’t suitable if you need long-term access to someone else’s money. For example, if you need to help an elderly relative look after their finances.

if you’re in this situation, read our guide on When someone needs formal help with managing their money.

Joint bank accounts – The pros and cons

If you have any doubts about whether to set up a joint account, don’t do it. You don’t need a joint account if you simply want to split everything 50:50, for example.

Pros

  • A straightforward way of sharing money and managing living costs, such as bills and mortgage or rent payments.
  • Some couples find that having a joint account – and rules for how to manage it – can help prevent arguments about money.

Cons

  • If one of you has a poor credit history, it’s not normally a good idea to open a joint account. As soon as you open an account together, you’ll be ‘co-scored’ and your credit ratings will become linked. This doesn’t happen by just living with someone – even if you’re married.
  • You’ll lose some privacy. All other account holders will be able to see what you’re spending money on.
  • If one of the account holders takes money out of the joint account, there aren’t many options for getting it back.
  • If the account becomes overdrawn, each joint account holder is responsible for the whole amount owed. This means you could end up being responsible for paying someone else’s debts.

Joint accounts for Universal Credit payments

If you and your partner are claiming Universal Credit, you’ll get one payment for both of you – not one each. But this doesn’t mean you have to open a joint account. If you’d rather, you can get the money paid into an account with only one of your names on it.

Opening a joint account

Opening a joint account isn’t so different from opening a normal current account.

Each account holder just needs to fill in their section of the application form and provide proof of address and proof of identity.

Tax-free savings

Basic rate tax payers can earn up to £1,000 interest on their savings without having to pay tax and higher rate tax payers can earn up to £500 worth of interest tax-free. Find out more on Tax on savings accounts.

Speak to your bank during the application process, and ask them to explain:

  • if anyone can take out money without getting permission from others on the account
  • how overdrafts will be handled. Usually, each account holder is responsible for paying back all the money owed. The bank might take money from someone’s personal account to cover the overdraft in the joint account
  • how to handle disagreements or the end of a relationship between joint account holders.

The formal agreement on who gets to do what with the account is called the ‘mandate’ or ‘authority’.

All account holders have to sign the mandate when you open the account.

Most of the time, interest is split equally between both account holders and will go towards each of your Personal Savings Allowances (PSA). This is the amount of savings interest you can earn each year without paying tax. If you are in different tax brackets, the interest is still split evenly. You can read more about the Personal Savings Allowance on our site.

If things go wrong

How to handle disagreements with other account holders

If you’re having problems with your fellow account holders, cancel the mandate.

This will freeze the account so no one, including you, will be able to withdraw money.

Your bank will only unlock the account once everyone agrees on how to split the money.

And, if you can’t reach an agreement, the only option might be to let the courts decide who gets what.

If your bank or building society goes bust

Just like other accounts, joint accounts are protected by the Financial Services Compensation Scheme (FSCS) – up to £85,000.

For joint accounts, the FSCS assumes that each account holder holds an equal share.

So, for a two-person joint account, you could deposit £170,000, or £85,000 each – and it would all be protected.

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