You and your

joint account

A guide for customers

Cover image: © HD Connelly, 2010
Used under license from Shutterstock.com.
How can this leaflet help me?
This document will help if you currently hold – or are considering
opening – a joint account. It answers a number of frequently
asked questions about joint accounts from ‘Is a joint account
a good idea?’ and ‘Will the other joint account holder’s credit
record affect mine?’ to ‘What if I get into a dispute with the other
joint account holder about the joint account?’
This leaflet covers personal joint accounts for:
• current accounts;
• savings accounts; and
• personal loans.
It does not cover joint business accounts or joint
account mortgages.
Not all banks or building societies offer all the products and
services described in this leaflet. If you are not sure which
services your bank or building society offers, you should get in
touch with them.
Joint accounts are useful if you share a lot of financial
arrangements with someone else. But with the added
convenience come extra responsibilities. Some of these are
important and may not be obvious. This leaflet explains some of
the things to look out for.

Frequently asked questions about

joint accounts
What is a joint account?
A joint account is an account opened in the names of two
or more people. In this leaflet we assume there are just two:
you and the other joint account holder. You can have a ‘sole’
account as well as your joint account. A sole account is held by
just one person.

What are the main features of a joint account?

The way a joint account is run, by both you and the bank, is
controlled by a document called a mandate or authority which
each account holder must sign. Often this document will form
part of the joint account application form.
• Either of you can use the joint account, although under
the terms of the mandate both of you may have to sign
whenever money is taken out of the account.

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• Both of you are separately responsible (and together you are
both responsible) for all debts on the joint account. This is
generally true even if only one of you puts all the money in
the account or if only one of you takes all the money out and
spends it.
Together you can organise how the money in the joint account is
split or how you will repay any borrowing on it. This is a private
matter between you and does not affect the bank or building
society or the terms your joint account runs on. The bank or
building society will still treat each of you (and both of you) as
being responsible for all debts.

Is a joint account a good idea?

It depends on your personal circumstances and those of the
person you are thinking about opening the joint account with. It
could help you to:
• manage your joint household budget;
• avoid having to decide who pays a bill each time;
• avoid charges;
• earn extra interest by having more money in a joint
account than you would have in two sole accounts;
and
• sign cheques alone if one of you is away from home for
long periods.
You should only open a joint account if you and the other joint
account holder understand the commitments you are entering
into. You also need to think about what would happen if you split
up, or if one of you died.

How is a joint account operated?

A joint account might be set up in one of the following two ways:
• Both-to-sign – this applies if you both want to give your
permission every time money is taken out of your joint
account. This will mean that both you and the other joint
account holder know what is being taken out of the account.
This may make things more complicated, as it means you
will both have to sign every cheque and other withdrawal
instruction, even for small amounts.
Some banks and building societies may only offer joint accounts
with either-to-sign. Others may let you choose – for example –
that both of you must sign for transactions over a certain
money limit.
If you are at all worried about how the other joint account
holder may use the joint account, you should consider carefully
whether a joint account is for you.

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Payments
You will both be responsible for payments from the
account made in the way you have agreed with the bank or
building society.

Overdrafts
If you have agreed an either-to-sign joint account, the other
joint account holder will be able to make the joint account go
overdrawn without you agreeing or knowing about it (if the bank
or building society lets them, for example, by paying out the
cheques they sign).
You are both responsible together, as well as separately, for any
overdrawn balance, even if you did not know about the overdraft
or disapproved of it. This applies whether:
• the overdraft was agreed by the bank or building society;
• the joint account was overdrawn because the bank or
building society paid cheques or other payments from the
joint account, even though there was no agreed overdraft or
the balance of the account went over the overdraft limit; or
• the overdraft was unauthorised.

Will the other joint account holder see information about

my transactions?
You are both entitled to see all information about all transactions
on the joint account. If you are not happy about this, do not
open a joint account.

Can we change an either-to-sign joint account into a

both-to-sign joint account, or the other way round?
If you set up a joint account where either of you can sign, either
of you can arrange separately with the bank or building society to
only accept transactions with both signatures in future. However,
not all banks and building societies will do this and they may
suggest that you both open sole accounts instead.
The bank or building society will need a reasonable amount of
time to make the change. Once the change has been made, any
cheques signed by just one of you under your old instructions
may have to be returned unpaid, even if they were signed when
the old either-to-sign instructions applied.
If you set up a both-to-sign joint account and you want to
change it to either-to-sign, you both have to agree to this and so
does the bank or building society.

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Can I change a joint account into a sole account?
Yes, as long as it is in credit, but you both have to agree to this
and tell the bank or building society. They will want you both to
agree how you are going to divide the money in the joint account
between you. Some banks and building societies will not let you
change a joint savings account to a sole account, so you may
need to close the joint account and open a new account in your
own name.
If the joint account is overdrawn, the bank or building society
may not let you change it to a sole account unless you both agree
with the bank how you plan to pay back the debt between you.

Can a power of attorney be applied to my joint account?

A power of attorney lets you give someone else responsibility for
your finances. Subject to the applicable terms and conditions, a
third party may be given access to a joint account on behalf of
one of the account holders.

What happens if the other joint account holder becomes

mentally incapable?
In England and Wales, if one party to the joint account loses
capacity to operate their account, banks and building societies
will use their discretion to determine whether or not to
temporarily restrict the operation of the account to essential
transactions only (for example, living expenses and medical/
residential care bills for both parties) until a deputy has been
appointed or a power of attorney registered.
In Scotland, you can continue to run the account as long as the
original account mandate was either-to-sign and there is not a
court order preventing the account from being used.
In Northern Ireland, practices vary between banks so you should
speak to your bank, which will be able to tell you what its
practices are.
If the other joint account holder appointed you as attorney,
under a ‘lasting power of attorney’ (in England and Wales) or a
‘continuing power of attorney’ (in Scotland), you can register the
power of attorney and run the joint account.
If they appointed someone else, that person would have to
agree with you and the bank or building society how to run the
joint account and the bank or building society may need a new
mandate from you both.

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What happens to my joint account if the other joint
account holder becomes bankrupt?
The bank or building society will freeze the joint account when
it learns about the bankruptcy and will have to return cheques
drawn on the joint account, even if it is in credit. This is because
the money in the joint account would come under the control of
you and the person who is in charge of the assets of the other
joint account holder. It is unlikely that you will be able to use the
money in the joint account for some time.

Will the other joint account holder’s credit record

affect mine?
Yes. Usually, credit reference agencies will create a financial link
or ‘association’ when you set up an account in joint names that
lets you borrow money. This means that your financial affairs and
those of the other joint account holder may affect each other.
You may find it more difficult to get credit, even in your own
name, if the other joint account holder has a bad credit history
or runs into problems in future. Equally, if the other joint account
holder has a good credit record, you may find it easier to get
credit in your own name.

Disagreements between
joint account holders
What if I get into a dispute with the other joint account
holder about the joint account?
If it is an either-to-sign joint account, the bank or building
society may be able to give you more control by changing it to
a both-to-sign joint account, if you ask it to do so.
You or the bank or building society may decide it is best to
freeze the joint account, so that no new transactions can be
made on it, or that payments can only be made if you and the
other joint account holder both agree. The bank or building
society may do this if you explain that there is a dispute
between you and the other joint account holder about money
in the joint account.
Normally this will be a temporary step, to protect you both until
the bank or building society can get instructions from both of
you. Meanwhile, the bank or building society may be able to set
up a separate sole account for you to run on your own.

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What happens if my partner and I split up?
If you have a joint account with your husband, wife or partner
and you split up, you both need to contact your bank or building
society to arrange for the joint account to be closed and to open
new accounts in your own names.
The bank or building society will need to know how you want it
to handle any standing orders or direct debits that you have on
the account. It will need to know how you are going to divide the
money in the joint account between you, and agree how you will
deal with any overdraft on the joint account.
The bank or building society may continue to run your joint
account in the usual way until it receives new instructions from
you or the other joint account holder, even if it learns that you
have split up. However, depending on what you and your
partner tell them, some banks and building societies may freeze
a joint account until they receive further instructions from both
account holders.

Will I still be responsible for cheques my partner writes

after we split up?
The bank or building society may continue to pay cheques
written on the account. Both you and the other joint account
holder will still be responsible for the cheques.

What happens to my joint account if I die?

If you live in England, Wales or Northern Ireland
In England, Wales or Northern Ireland the balance on your
joint account usually passes automatically to the surviving joint
account holder and will belong to them. There can be important
advantages, but also drawbacks, in this. If you want your assets
to go to someone in particular (like your husband or wife) when
you die, having a joint account with them is normally very helpful
as long as they are the only other joint account holder and they
live longer than you. They will be able to go on using the account
when you die.
However, if you have left your assets to someone who is not
the other joint account holder, that person will not get what is
in your joint account if you die. This is because, unless you have
made different arrangements with the other joint account holder,
the money in your joint account legally belongs to the other
account holder as well as you, and that means it isn’t yours to
give away.

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This also applies if you have not made a will. If your assets pass to
your partner or children, they will not get what was in your joint
account unless they were a joint account holder and live longer
than you.
This is important and if it is likely to cause a problem you should
not open the joint account, or you should get legal advice before
you do.
If there is an overdraft on the joint account when you die, the
bank or building society will apply to the person who is carrying
out the instructions in your will, and the other joint account
holder, to work out how the debt will be paid back. It may want
the other joint account holder to pay it off, for the money to
come from your assets, or a mix of the two.

If you live in Scotland

In Scotland different rules apply, so that when you die, the
money in your joint account will not automatically pass to the
other account holder if they are still alive. It will depend on the
terms of the mandate. If the mandate allows control of the joint
account to pass to the other joint account holder and they live
longer than you, they and your estate will be responsible for any
money owed to the bank or building society on the joint account.
If there is money in the joint account when you die, whoever
is carrying out the instructions in your will may need to make a
claim against the surviving joint account holder for your share of
the money in the joint account. In other cases, the joint account
will have to be frozen until the person who is carrying out the
instructions in your will is given control of your assets. Then the
bank or building society will only act on the orders of the person
who is carrying out the instructions in your will, and the joint
account holder who lives longer than you.

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© UK Finance, July 2017
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