Couples ignorant of the small print for joint bank accounts

About a third of couples, married or living together, opt to pool their savings and manage their everyday cash in a joint bank account.

Sharing an account has an impact on the credit history of each partner. Photograph: Adam Gregor/Getty/iStockphoto

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.

The research, from website 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.

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

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 Either person can use the account, although, depending on the terms, you both may need to sign when money is withdrawn.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

They can make it easier for a couple to manage the money they have coming in and going out every month. A joint account could also be a useful place to pay bills from. And it may be possible to boost the interest you are earning by having one larger pot of cash rather than two separate smaller pots.

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 and M&S Bank found three-quarters (74.1 per cent) 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 per cent) 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 per cent) 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.

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 per cent) 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, 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.”