If you and your partner are splitting up, it’s likely that you’ll have some joint finances, such as bank accounts or loans, to sort out. You may also have taken out insurance policies and have bills in both your names that you will need to cancel or transfer. Find out what you need to know and do.
- Why you may need to act quickly
- Sorting out your joint bank accounts
- Dividing savings
- Second cards on credit and store card accounts
- Sorting out joint insurance
- Agreeing how to divide the bills
Why you may need to act quickly
Generally, it’s better if you can talk about how you’d like to sort out your joint money, rather than leaving your ex-partner to find out afterwards that you’ve closed down accounts.
But it’s important that you act quickly if you think your ex-partner could run up debts on joint accounts.
That’s because if you have any joint loans or overdrafts, either of you could be asked to repay the full amount.
You should also think about the effect that any joint debt could have on your personal credit rating, as a good credit score means you’re more likely to get cheaper deals when you’re applying for credit.
Another reason to check your score is because you’ll be able to see how you are financially connected. You can check it for free, and there are manageable steps you can take to improve it.
Sorting out your joint bank accounts
Try and agree with your ex-partner what you’d like to do with your joint bank account(s).
If you can’t agree, mediation (using an impartial third party) is often a good way to sort out these practical matters.
You or your ex-partner should contact your bank or building society as soon as you know you’ll be separating.
You should consider:
- changing the way the account has been set up, so you both have to agree to any money being taken out or overdraft limits being increased.
- making sure that your wages or benefits go into an account just in your name in the future.
- asking the bank to suspend telephone and online banking on your joint account(s).
- working out how you will pay bills that are currently being paid from your joint account. It might be that you agree to continue paying certain bills (such as your rent or mortgage).
- freezing the account as a last resort if you are worried that your ex-partner will withdraw money. Bear in mind that, while one of you can ask the bank to freeze an account, both of you, normally, have to sign a letter to say you want it ‘un-frozen’. Consider also any difficulties you might face if you have Direct Debits or standing orders coming out of the account or if you make regular payments such as your mortgage or rent, bills or food shopping from it.
- closing the account, if you don’t have much money in it or you won’t use it in the future. Both of you have to agree – normally in writing – to close a joint account. You won’t be able to do this until any overdraft has been paid off.
Hopefully, you’ll be able to agree how you will divide any joint savings you have.
How the law treats your right to money in a joint account depends on whereabouts in the UK you live.
England and Wales
If you’re separating from your partner, money in a joint account belongs to the person who paid it in.
But a partner who hasn’t made a contribution to a joint account could make a claim for a share of it.
However, it can be difficult to prove that you own the money in a joint account if you aren’t paying into it.
You have to show that it was the clear intention of the joint account to have a common fund which each person could use.
If you’re married or in a civil partnership, money in a joint account belongs to both of you equally.
If you’re separating from your partner, divorcing or dissolving your civil partnership, money in a joint savings account belongs to each of you equally, unless a court decides differently.
Money that a married couple or those in a civil partnership have in a joint savings account that was opened during the marriage or civil partnership belongs to the account holders in equal shares.
If you can show that you paid in more money, you might be able to claim an unequal share of the money in the account.
If you’re splitting up having lived together, money you have in joint accounts for household bills or similar would be assumed to belong to both of you in equal shares.
How you go about dividing your savings might depend on the type of account you have.
Second cards on credit and store card accounts
If you have a credit or store card account and your ex-partner has a card for their own use, you are liable to pay for their spending as well as your own.
It’s a fine balance between acting quickly and asking the card company to block the account (which will mean blocking your card as well as your ex-partner’s), and leaving your ex-partner without money if they rely on this card for day-to-day spending.
Try not to do anything rash.
Sorting out joint insurance
If you have a home insurance policy in both your names and, for example, your ex-partner is moving out, you might have to ask him or her to sign a form or letter to say that they are happy for their name to come off the policy.
You might be a named driver on your ex-partner’s car insurance – or they could be one on yours.
If the policy is in your name, contact your insurer and ask them to remove your ex-partner’s name, if they won’t be driving your car in the future.
Agreeing how to divide the bills
Take meter readings for gas and electricity if you or your ex-partner is moving out so you aren’t charged for energy you haven’t used.
Taking over an account that was in both your names should be straightforward.
You can normally do this online or over the telephone, but you and your ex-partner will be responsible for paying any money you owe up to that point.
If you want to take over a bill in your ex-partner’s name, the old account will have to be closed and a new one set up.
Your next step
This article is provided by the Money Advice Service.