You are here: Home - Saving & Banking - News -

Joint account holders don’t understand terms, finds survey

0
Written by: Paloma Kubiak
14/09/2017
Three quarters of UK adults don’t know that each person in a couple is liable to pay the entire debt on a joint account.

The 74% of confused adults weren’t aware the bank may pursue either of the parties to pay the full amount of the debt.

Almost half of the 2,000+ people polled (46%) 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.

Further, 12% incorrectly think only the person who runs up the debt is responsible for paying it.

The research carried out for SavvyWoman and M&S Bank also revealed that nearly nine out of ten people (87%) want banks to provide clear information when they opt to open a joint account.

Almost a third want banks to provide a one page summary (such as that provided by M&S Bank) and to explain key terms separately while 43% want banks to produce a one page summary.

It comes as the survey showed that over four in ten of people who have a joint account with their partner didn’t fully read the terms and conditions provided by their bank.

Given that official statistics indicate that over four in ten marriages in the UK end in divorce while a higher number of unmarried couples end a relationship, two in ten said they have had to pay off an ex-partner or ex-spouse’s debts on a joint bank account.

The research also revealed much confusion over running a joint account as 41% wrongly thought both people would need to use a cash machine, 70% incorrectly think they need each other’s approval to set up an arranged overdraft while 47% thought they need the approval of both parties to make a cash withdrawal.

Worryingly, nearly half (46%) don’t think or don’t know their credit report can become linked to someone else’s if they have a joint current account together.

Sarah Pennells, founder of SavvyWoman, said: “Thousands of couples open joint accounts each year and I’ve been concerned for some time that many of them don’t know what they’re signing up to. If a relationship breaks down, one partner can be left with debts of hundreds or even thousands of pounds.

“We’ve previously called for banks to give couples clear and concise information about their responsibilities for any debts on joint accounts, so couples who open a joint account know exactly what their bank will do and what’s expected of them.”

 

Tips to opening a joint bank account

Pennells lists the following tips for couples thinking of opening a joint account:

  1. Make sure you read the terms and conditions before you take out a joint account.
  2. Don’t agree to an overdraft facility if you don’t need one and, if you do, limit the amount you borrow to what you need and are able to pay back.
  3. Agree with your partner exactly what the account will be used for before you open it.
  4. Check the account regularly so you know what it’s being used for.
  5. Contact your bank immediately if you and your partner split up, especially if it is acrimonious. Ask the bank to change the way the account operates so you both have to agree to any withdrawals or new payees.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week