If you’re in a serious relationship with someone, chances are you might have talked about getting a joint account to pool your savings and manage your everyday cash.

But while these accounts can be useful, new research suggests many people are in the dark about exactly how they work – which, in some cases, could lead to nasty surprises further along the line.


The research, from website SavvyWoman.co.uk and M&S Bank, found many people who do have a joint account with a provider admit they didn’t read the small print when they signed up to it. And there’s also confusion about who’s liable for debts when couples split up.

So here’s a guide to how joint accounts can help with your finances – and the pitfalls to watch out for.

affectionate young couple going through paperwork while doing their budget at home

How do joint accounts work?

While you may want to have your own separate bank or building society account, you may also want to share an account with someone else.

Either person can use the account, although, depending on the terms, you both may need to sign when money is withdrawn.

Joint accounts allow the account holders to decide between themselves how money held in the account will be used and how any borrowing on it will be paid back.

What are the potential benefits of having a joint account?

They can make it easier for a couple to manage the money they have coming in and going out every month, in one place. This is especially helpful if you are living together as a way of paying bills through one account.

Joint bank accounts promote trust within a relationship. They could also be helpful for putting money aside for bigger investments like holidays, children or pets.

A joint savings account may also alleviate problems about money. Discuss your different financial positions and whether it would be most fair to pay the same amount, or a proportional amount of your earnings.

It may also be possible to boost the amount of interest you are earning by having one larger pot of cash rather than two separate smaller pots.

what is a joint account

What could the pitfalls be?

Many people don’t seem to realise that they could potentially be pursued for the full amount of debt run up on a joint account – not just a proportion of it.

The research from SavvyWoman.co.uk and M&S Bank found three-quarters (74.1%) of UK adults don’t know that each person is liable to pay the entire debt on a joint account, and that the bank or building society may pursue either for the full amount.

Nearly half (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.

And over one in 10 (11.9 %) incorrectly think that only the person who runs up the debt is responsible for paying it.

Will having a joint account affect your credit record?

Credit reference firms may create a financial association between both joint account holders – which could be positive if the other person has a good credit history, or problematic if the other joint account holder has a bad credit history.

This association could impact on your ability to take out credit in the future. Make sure you each run a free credit check online before taking out a joint account – it simply might not be worth the risk.

So what should you consider before opening a joint account?

It’s vital to make sure you understand all the terms and conditions. The SavvyWoman/M&S Bank survey found that over four in ten (42.3%) people who have a joint account with their partner didn’t fully read the terms and conditions that their bank provided.

It may not be a nice thought, but consider what would happen if you split up. Sarah Pennells, founder of SavvyWoman.co.uk, says: “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.

what is a joint account

“If a relationship breaks down, one partner can be left with debts of hundreds or even thousands of pounds.”

So if you’ve got doubts about how the other account holder may use the joint account, it’s all the more important to think carefully about whether a joint account is the right option.

UK Finance, which represents banks and other firms, says that while joint accounts offer a useful service, as with any product, it is important customers fully understand the terms and conditions before they sign up.

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