Moving in together: best way to bank?

geekonthepc · 18 July 2017 at 10:51PM

Hi there,

My partner and I (both in early 20s) are due to move in together in the Autumn. For both of us, this will be the first time moving in with a partner - both of us currently live with our parents.

We both have stable (we hope!) jobs with relatively decent salaries, and being a long time user of this forum/site, I've of course done as much of the maths as I can. I'm confident we'll both be able to comfortably pay the rent, bills and day-to-day costs.

My question is - what's the most sensible way to pay joint bills? The most obvious answer to me is a joint bank account, but I'm curious as to how they work.

Both of us have decent credit ratings and have never ran up large debts.

I realise that setting up a joint bank account creates a "financial link". Neither of us really have a problem with this as we don't plan to run into debt, but:

Does this link apply permanently (6 years from the last record), or is the link broken should we ever close the account (split up - hopefully not!)?
Can we open any normal bank account as a new joint account, even if either one of us has a sole account under the same branding?
Does the "financial link" apply even if we open a cash account rather than a bank account? Does opening a cash account have any negative effect on credit rating?

Thanks so much for any advice or past experiences!

geekonthepc

Don80 · 19 July 2017 at 11:11AM

Hi

Congratulations on the next step of your relationship!

Financial links are created when you apply for a product that has the potential for credit. So that means current accounts, credit cards would create a link. A savings account would not. It depends on the purpose of the account - a savings account would not be helpful to pay bills. It sounds like you are looking for a current account which would link you.
http://www.moneysavingexpert.com/loans/credit-rating-credit-score#linked

A financial link would be on your credit file for as long as you are linked. Usually when you close any relevant joint accounts that should end, but it helps to send a notice of disassociation to credit reference agencies. That would likely slow down future applications (as does any dispute you put on your file) but shouldn't negatively affect the outcome.

Most banks allow you to have 2 current accounts, one in your name only, and another in a joint name, so opening a new joint account wouldn't be an issue. You may need to provide ID again though, unless they can get enough from your credit file. I opened a new account with the Bank of Scotland and I didn't have to go in with ID.

If you are both good with money, and manage credit responsibly then this should not be an issue at all. So it's all about past behavioural patterns and trust really. If in doubt, you should both sign up to the MSE Credit Club and check your files before you apply for your account.

As always, make sure you check what accounts are available and choose one that will suit the purpose of the account. If it's for bills, there are accounts that offer cashback for paying by direct debit (RBS/NatWest/Santander but these have monthly account fees), others pay £3 a month for paying in £750 and having 2 direct debits (Halifax) which may be more than the cashback accounts after the monthly account fee is taken into account.

Don't just settle for a "normal" account. Check! Maybe you could look at your existing bank and move your single account too for a switching bonus (helpful extra cash when moving!). I moved an account to Halifax and got over £100 in less than a week of opening the account.
http://www.moneysavingexpert.com/banking/compare-best-bank-accounts

Batman2017 · 19 July 2017 at 11:37AM

Hi,

Congrats on taking the next step. I cant really comment on the technical aspects but I can give my experience. Me and my now wife moved in together to our own home 6 years ago. We decided to have a joint account for all earnings and outgoings. This is quite different to most i expect.

For the most part it has been the best decision as beforehand i was always going overdrawn and overspending. When its somebody elses money to consider though you do be more careful.

Further to that i was earning about 3 x my wifes salary back then. Now she earns slightly more than me. Very rarely do we complain if the other makes an unexpected purchase.

This wont work for most but were more than happy with it.

geekonthepc · 19 July 2017 at 12:02PM

Thank you both for your input - incredibly helpful. I think a joint account should be absolutely fine in which case and we might as well go for a rewarding one as mentioned. Switching in would give us a little extra cash too, so I’ll see if I can end an old account.

Many thanks for your help!

badger09 · 19 July 2017 at 12:50PM

geekonthepc wrote: »

Thank you both for your input - incredibly helpful. I think a joint account should be absolutely fine in which case and we might as well go for a rewarding one as mentioned. Switching in would give us a little extra cash too, so I’ll see if I can end an old account.

Many thanks for your help!

I'll throw in my thoughts. If you're both sure you want to be linked financially, by all means go ahead and open a joint account which best serves your current situation - so possibly one that gives cashback on bills and debit card spending. Keep your existing current and savings accounts separate and agree how much you are each going to pay into the joint account every month, and also agree on what expenditure this will cover. You can change the figures and what it covers later if necessary.

I would also open the joint account with a different bank from the ones you already use. That way, if there is ever a problem, such as system failure, you have at least 2 other accounts you can use to pay your bills.

You won't be able to switch a sole account into a joint account though, so if you want a switch incentive, you can convert an existing sole account into a joint one, then switch.

YorkshireBoy · 19 July 2017 at 1:13PM

badger09 wrote: »

You won't be able to switch a sole account into a joint account though, so if you want a switch incentive, you can convert an existing sole account into a joint one, then switch.

Its the other way round that can't be done via the CASS, ie joint to sole. Having said that, there was just one recent incentive offer that wasn't available for sole to joint switchers.

badger09 · 19 July 2017 at 3:30PM

YorkshireBoy wrote: »

Its the other way round that can't be done via the CASS, ie joint to sole. Having said that, there was just one recent incentive offer that wasn't available for sole to joint switchers.

Ooops sorry:o

trailingspouse · 19 July 2017 at 5:06PM

My pennyworth - communication is the key. Talk to each other about your expectations, your plans for the future, your ideas of what is 'normal' spending and what is a 'treat'. There's no point one of you saving hard for a deposit on a house if the other is feeding a gaming habit.

OH and I have a joint account - everything goes in to this account, and everything comes out of this. We put any surplus in to savings accounts (these are in our individual names, but we still think of it as 'our' money). That system works for us, but it wouldn't work for everyone - it's all about communication and trust.

geekonthepc · 19 July 2017 at 8:58PM

Thank you everyone - some incredibly useful advice there.

One last question - I would like to get services like broadband on order before we move in so we don't have the horrible period of waiting for broadband. Can we open the joint bank account with us at different addresses (so we have the joint cards before we move in) or will the bank not let us set it up until we live at the same address?

Thanks so much everyone, this has been incredibly helpful.

trailingspouse · 19 July 2017 at 9:26PM

Yes, you can open a joint account while at separate addresses.

geekonthepc · 19 July 2017 at 10:46PM

trailingspouse wrote: »

Yes, you can open a joint account while at separate addresses.

Thank you!

Moving in together: best way to bank?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free