Should we use a joint account for everything? Or get a joint account only for the bills? How will a joint account affect our credit scores? Is it best to both use the same bank?
I’ve seen a few questions about how couples share finances recently, so I’ve brought them together into one article.
Contents
Should we use a joint account for everything?
Don’t rush into this!
Not only are you linking your credit records (see below) but many couples find it harder to manage a budget if there are two people spending from the same account. You could both think there is quite a bit of money in the account and both of you may then spend the same money…
If you have been living together for years and you both feel very comfortable with the other one’s spending patterns and how you jointly budget, then that’s fine.
Some people like the feeling of being a team and handling everything together.
But even here people often prefer to have their own “spending money” in an account which isn’t joint. Then you don’t have to explain to your partner how much you are spending on a hobby or on their Xmas present.
Or get a joint account for the bills?
You can each set up a standing order to pay money into the joint bills account when you get paid. And all the standing orders and direct debits for shared bills (rent, council tax, utilities, insurance etc) are set to come out of the new joint account.
Some couples only do this for the big regular household bill: mortgage or rent, council tax, energy and water, broadband. Others include all “household” bills such as Spotify, insurances, car finance repayments.
Others put all expenditure apart from some personal spending money through the joint account, so it becomes the normal account to use for at the supermarket, for petrol, the kids’ clothes etc. If you are getting child benefit or other benefits, they could also be paid into this joint account directly.
The practicalities of a joint account
Many banks will let you add another person’s name to your existing account. This can feel like the simplest and quickest way to get a joint account, but it has the disadvantage that you no longer have a personal account of your own. If you only want a joint account for bills, not for everything, this doesn’t really work.
You will need to decide when you open a joint account whether one of you can take money out and make payments on their own, or whether you both have to approve everything.
Joint accounts don’t run themselves… at least one of you needs to keep a close eye on that account, as much as you would your own account.
How a joint account affects credit scores
By having a joint account, you get an “association” with your partner added at the credit references agencies: Experian, Equifax and TransUnion.
If you both have great credit scores, or if you already have other joint credit (loan? mortgage?) then this linking of your credit records doesn’t matter.
But if one of you has problems, that will harm the other person’s credit score… and the person with the bad score won’t see any improvement from being linked to someone with a good score.
When you both have poor or both have fair scores, you may not think this is a problem. But perhaps one of you has a score that will improve faster? That will be held back by a link with your partner whose score isn’t improving fast.
So it’s usually best to avoid joint accounts unless you both have a clean credit record.
Will you contribute equally to it?
If you earn much the same the simplest solution is often the best. But what if one of you earns a lot less, is on maternity leave, is a student, has a very variable income…
It’s a good idea to talk this through with your partner to see what feels fair to both of you, and how it may change over time. A lot of couples suddenly faced this problem in 2020 when one person lost their job or was furloughed because of coronavirus.
The three alternatives to joint accounts
If you don’t want a joint account, because it feels too soon or because of credit score worries, but you still want a way to share bills, most couples use some variation on these three approaches.
Split the bills
You decide who pays each bill, for example one of you pays the rent and the other pays the council tax and utility bills.
One of you get a bills account
If this account is just for regular bills that are going to be paid mostly by direct debit or standing order, one of you – usually the one with a better credit rating – sets up a separate account for the regular bills and you both pay into that account when you get paid. Then the rent, council tax etc are all paid from that account.
The other person can’t add a new bill or take money out, but if this is just for the big regular bills, that doesn’t matter.
Managing everyday expenses such as food and petrol
Many couples also want to share most everyday expenses.
If one person has a good credit record, they could get a credit card and the other person could have a second card on the account. The account holder is totally liable for the whole debt, it won’t show on the person’s credit record at all.
But this risks running up debt unless you are both disciplined not to overspend.
A pre-paid debit card is more of a shared approach and doesn’t risk any debt. You can each have a card and you can only spend up to the amount of money that has been paid in. So you both fund it with £150 a month or whatever when you get paid, then either of you can spend it.
This may sound perfect – but look out for the charges on these cards as they can add up to a lot!
Some questions I have been asked
If we have a joint account, does that mean all our debts are joint?
No. Opening a joint account doesn’t change who is liable for a debt. Nor does getting married!
If there is an overdraft on a joint account, you are both liable for the money.
Is it best to both use the same bank?
I’m not sure what the advantage would be of both using the same bank. And for those very rare occasions when one bank has major systems problems, you may be glad that the other person can still get money out from their account with a different bank!
Financial abuse
I started this article by saying don’t rush into having a joint account. It’s even more important to avoid a joint account and have an account of your own if you feel your partner is too controlling over money.
Only you know how serious this is. There is a big difference between a partner who just grumbles a bit about what you spend in the pub or on clothes and one who crosses the line into financial abuse. Read How to tell if your partner is a money bully and try to talk to a friend about it or go to your local Citizens Advice to discuss it.
His & Hers – debts in a relationship
How piggybanking helps you budget
Get a good bargain & avoid the bad buys!
kay says
I am 3 years into a relationship & my partner gives me half the total of the bills & half for the food shopping, I am paid into my bank account from work & my partner gives me cash when he gets his wages, all I do is put what I need into my account & leave a 50 quid cash float for quick everyday stuff.
It works for us & as my bills are quite low I can save a little for Christmas & any household repairs or if something needs replacing, I find doing it this way is far easier & my partner has access to the books I keep regrading the utility bills etc .
I think its safer to do it this way for us as we met later in life & I didn’t want to become dependent on my partner just incase it didn’t work out, so I know if push comes to shove I can maintain the bills on my wage if need be
Sara (Debt Camel) says
There are, as they say, lots of ways to skin this cat. I think many people later in life have a much clearer feel that they want to keep their finances very separate – both through worries about what may happen if you break up and through the practicalities of you both having children and/or debts from previous relationships.
Helen Wheatley says
One thing to be aware of, is how hard it is to close a joint account as you cannot unilaterally remove the other person, even if the account is in credit or empty.
I’ve twice split with partners I had joint accounts with (for bills) and both times this has been difficult.
The first he just left and I had no way to contact him. I had added him to my bank account (though I had another account) and they would not take him off. I cancelled his card (by telling them he had lost it and was abroad!) but that was all I could do. in the end I had a full-on meltdown in the branch and they said they would take him off “just this time”.
The second time was a bit easier but there were forms we both had to fill in, and as we were not really on speaking terms this was hard to deal with, and had to be posted back and forth and needed quite a lot of information from me that I was not prepared for him to see.
Mike_p says
We started off with a joint account for bills and kept our own personal accounts, but after a few years moved to using the joint one for everything and it was far more practical. We’d go out for dinner and one of us would pay for it and the other would transfer half, or one of use would need some new glasses and the other would transfer some money to go towards it, so using three joint one made it easier.
It does mean we have to regularly dscuss our spending plans but we quite like that as it cuts down on a lot of unnecessary spending. Our joint account is now with monzo and we both get an app notification when anything is spent.
Sara (Debt Camel) says
I think getting a joint bills account first and later moving to completely shared finances is a good step by step approach.