Savings advice for couples

Opening a joint account as a couple has several benefits that can make saving easier. Many joint accounts enjoy perks that personal accounts don’t. Some of the benefits of a joint account include:

• Double the protection

Personal savings accounts benefit from protection up to £85,000 per bank or building society if your provider goes bust. However, joint accounts enjoy double the protection, at £170,000.

• The rule of survivorship

If one partner passes away, the balance of the joint account is typically transferred to the surviving account holder. If it is in two separate accounts, accessing the account may take time and require legal processing. This may cause issues if you rely on the joint account to pay for regular expenses such as bills.

• Making saving easier

If you’re saving for something big like a wedding, holiday or a new home, then having a shared account can be a useful way to monitor your savings and plan how much to set aside each month. It means you can both agree to put a certain amount aside each month to meet your savings goals.

• Your credit score won’t be affected

As savings accounts aren’t reported to credit reference agencies, any savings accounts you open won’t affect your credit history, including if you were to open a joint savings account with your partner.

Though there are plenty of benefits to opening a joint savings account, it is still a big financial decision. We’ve listed some of the things you might want to consider before committing to a joint account with your partner. These include: 

• Frozen accounts

If one partner loses mental capacity, the joint account may be frozen. Unfreezing the account could take months. The only way the account will not be frozen is if you have power of attorney or have been appointed a deputy by the Court of Protection.

• If you break up

Having a shared account may cause issues if the relationship ends. This could be because you cannot agree on how to split the money. It may also be because one partner abuses the account by spending money for a purpose other than that which the account was designed for.

For passbook-based accounts, you can look to request that approval from both account holders is required to make a withdrawal. In addition, where we are notified of a dispute we can look to freeze an account if required.

Luckily, it doesn’t have to be one or the other. You can find a middle ground and a compromise that suits both partners. You may also choose to lay out some simple rules to help you both navigate joint financing. Some ideas you may choose to implement could include:

• Keeping your personal account

Rather than having all your finances within one joint account, you may prefer to keep your personal account alongside a joint account. This will allow both partners to have their own, individual pot of money, as well as a shared pot.

• Relative contributions

When working out contributions, you may find it more useful to agree on a set percentage of your salary, rather than a monetary figure which may not be feasible if one partner earns less than the other. A percentage figure means the contributions will be relative to each partner’s salary.

• Being clear on the purpose

It’s important both partners understand exactly what your joint savings account is and isn’t for to prevent any arguments over spending. For example, you may agree that the money in the account is exclusively for a specific event, such as a holiday or wedding, and your personal accounts or other savings accounts are for any spending beyond this.

If you’re going to open a joint account with your partner, it’s important that money, budgeting and spending are conversation topics you both feel comfortable discussing. It’s also somewhere you can discuss your savings goals and wants so you can recognise each other’s needs as individuals. For example, it’s important to understand and compromise if one partner is more frugal and the other is more relaxed with their spending.

Keeping a joint budget planner is a great way to ensure both partners understand what they are committing to financially before starting a savings account together. This could be as simple as creating a spreadsheet you both have access to. Within the spreadsheet you can input of all your fixed and variables expenses.

This allows you to agree on all your monthly and annual outgoings outright before you open your joint savings account.

Aside from our ISAs, all our savings accounts can be opened as personal or joint accounts. The savings account best for you will depend on what you’re using it for.

If you’re looking for an account you can both regularly access in order to make payments on smaller and unexpected expenses, such as a rainy day fund for home/car repairs, a regular savings account or easy access account may be what you’re looking for. These allow you to start depositing from as little as £1 and are penalty-free for withdrawals.

If you want to start saving for bigger purchases like a wedding, a big holiday or a new home, a notice saver account may be more appropriate. With these you must give notice before you make your penalty-free withdrawals. These help with long-term savings as you can’t dip into your savings account on a whim.

Likewise, fixed rate savings accounts can help you save for bigger and expected purchases by limiting your access to your funds. A fixed rate savings account will usually pay a set rate of interest for a specified length of time, with either no withdrawals permitted during the fixed term, or at the expense of a withdrawal penalty.