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Joint account holders don’t understand terms, finds survey

Paloma Kubiak
Written By:
Paloma Kubiak

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.