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Written by: Annabelle Williams
Opening a joint bank account is a big step for many couples as paying bills, rent or a mortgage can be easier when the money’s coming out of a shared account.

But it’s not for everyone and can be risky, as banks hold both people responsible for overdrafts and debts built up on the account – and what happens if you separate?

So, think carefully before you jump – here are five things you should consider.

How a joint account works

Joint current accounts are usually opened by couples, but you don’t have to be married or in a civil partnership to have one. In fact, anyone can open a joint account, for example, housemates, or a parent with their and adult children.

You can still keep your personal current account alongside having a joint account with someone else.

Anyone named as an account holder has the right to withdraw money, set up direct debits, standing orders, make payments and write cheques. That also means overdrafts or unpaid direct debits will leave a mark on both people’s credit records – so by opening a joint account you are effectively saying you don’t mind that your financial future will be partly tied up with the other person.

Do you really need one?

Some people perceive the opening of a joint bank account as a sign of trust and commitment with their partner. For others it’s simply a hassle to have an additional bank account to manage on top of their existing current and savings accounts, credit cards, mortgage or rent, car loan and bills.

Many couples manage their finances long-term without using a joint bank account, so think about whether it’s really necessary. You could just as easily make a list of your shared overheads and decide who pays for what from your personal accounts – one person takes on bills and food shopping, while another pays the rent and cleaner.

When sharing a bottle of wine, a living room or a bed, each person knows they have to be considerate of their partner – and the same applies to joint bank accounts.

It’s vital to lay out your expectations in advance for what the bank account should and should not be used for. Some people have their salary paid into their personal account and have a fixed amount transferred into the joint account each month for shared expenses. Then bills and essentials are paid for out of the joint account, leaving both people with the rest of their salary in their own account.

This is the best way of safeguarding yourself financially if anything goes wrong in the relationship, months or years later. No-one wants to live defensively, but you also need to be practical – if something unexpected happens, you must have access to your own money in a private bank account.

Trial period

If you’re unsure about whether you and your partner could amicably share a bank account, agree upon a shared financial goal that you can both work towards.

Make it as small or big as you like, depending on your means; saving up for an anniversary treat, helping one person improve their credit score, or making overpayments to a mortgage, for example.

Having a shared goal is a practical way of aligning yourselves financially and during this trial period you can gauge whether or not your partner could be trusted with a joint account.

Budget to avoid conflict

Friction between partners often arises over spending habits. Set some guidelines for what’s acceptable to you both using the simple 50/30/20 rule. Look at your monthly income and mark out 50% for necessary expenditure, 30% to go towards paying off debts, savings or investments, and 20% for spending on nice things that make life worth living. These figures can be adjusted depending on your financial circumstances and priorities.

Retaining individual current accounts can help couples avoid arguments over spending, but if you do have your salaries paid into a joint account give each person an allowance for spending as they please. Take that money out in cash or transfer it into a personal account, so each person can have some financial freedom without the other seeing transactions listed on a joint account statement.

What happens if you break up?

During a break-up it’s really important to talk to your partner about what to do with the account even if there isn’t much money in it. There may still be upcoming bills that need paying and if the account goes overdrawn you’ll both be legally responsible for paying it back. The account can be changed to have one person’s name on it or closed if neither of you will need it in future.

Once you’ve decided to separate you ought to act quickly by calling the bank as there’s several things it can do to make the financial side of the break-up easier. It can change the account settings so withdrawals need both of your agreement, can stop the overdraft limit from being increased, make sure your salary is paid into your own account or even put a freeze on the account.

A lot of people aren’t aware of ‘financial abuse’, which is when a person uses money to control or harm someone else, but thankfully staff at most high street banks and building societies have been trained to help customers who might be experiencing it.

Annabelle Williams is personal finance specialist at Nutmeg

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