Joint bank accounts

A joint bank account is a single account held in the names of two or more people. It normally allows each holder to receive payments, pay by debit card, transfer money and manage the account, depending on the bank¹. People open them to manage household bills together, or with a spouse, civil partner or someone else they share money with².

The two things that most often catch people out are liability and the credit link. Everyone named on the account is equally responsible for it, and the bank could ask you to repay overdraft borrowing run up by another holder¹. Opening a joint account also adds a financial link to the other person on your credit file, so lenders can look at their credit history when you apply for credit in your own name³. If the bank fails, the Financial Services Compensation Scheme protects each holder up to £120,000, so two holders could deposit £240,000 safely¹.

How a joint bank account works

A joint account works like an ordinary current account in most respects: money is paid in, bills go out by Direct Debit or standing order, and each holder gets a debit card. The difference is ownership. Two or more people hold it together, and each of them has full access to the balance. Citizens Advice Scotland describes it simply: you can open a bank account jointly with other people, for example to manage household bills or with a spouse or civil partner².

A joint account normally allows two or more people to receive payments, pay by debit card, transfer money and manage the account, depending on the bank¹. Some guidance describes a joint account as owned by two people, and notes that you can change an existing account into a joint account or open a new one⁵. Either route ends in the same place: both names on the account, both with full rights over the money.

If you already bank somewhere and want to move, the Current Account Switch Service works for joint accounts, provided you are switching to another joint account and all account holders agree. You can also switch a sole account to a joint account elsewhere¹. The switch moves payments, balances and Direct Debits across in the same way as for a sole account.

A joint account is a practical tool for shared costs, but it is built on trust. Because each holder can act alone, the account works well only while the holders agree on how the money is used. The sections below set out what happens when that trust breaks down, when one holder dies, or when a creditor or the bank itself steps in.

Either to sign or all to sign: who can move the money

Most joint accounts are set up as either-to-sign, where each account holder can give payment and withdrawal instructions independently⁶. In practice this means either person can withdraw whatever money they want from it, without asking the other³. nidirect puts the same rule plainly: each account holder can withdraw money without asking the other person⁷.

Some banks offer an alternative arrangement, called all-to-sign. Under all-to-sign, all account holders have to make decisions jointly, but this usually limits management of the account to a branch rather than the app or online banking¹. It is a slower, more deliberate way of running an account, and it suits people who want a built-in check on spending, at the cost of convenience.

The choice matters most when one holder might act against the other's interests. With either-to-sign, one person can empty the account, and the bank will not treat that as unauthorised. If a relationship is breaking down, the options are to ask the bank to register a dispute and cancel the mandate, which freezes the account, or to close it, covered later in this page.

Shared debt: each holder owes the whole overdraft

Everyone named on the account is equally responsible for it, and the bank could ask you to repay overdraft borrowing made by another holder¹. StepChange states the position without qualification: you are both responsible if the account is overdrawn³. nidirect adds that with a joint account you are each liable for the other's debts⁷.

This is called joint and several liability. It means you and the other person are both responsible for the whole amount of money owed in a joint debt, not just your own share or half⁸. The bank can pursue either holder for the full overdraft, and it does not have to split its claim between them. Macmillan's guidance for people managing money alongside illness makes the same point: you are both responsible for any overdraft on the account⁵.

The liability does not end when the relationship does. If one of you goes bankrupt, the other person named on the joint debt becomes responsible for the whole debt⁹. StepChange also notes a common myth-busting point: joint bank accounts, loans and mortgages all carry this joint and several liability, so a joint account is not a way of halving what you owe¹⁰.

A bank can also use its right of set-off to take money from a joint account to cover a debt. The permitted transfers are: from your sole account to a debt only in your name; from your sole account to a debt you hold jointly; and from your joint account to a joint debt, if the same two people are named on both¹¹. The dedicated page on the right of set-off explains how this works in practice.

A joint account links your credit files

Opening a joint account adds a financial link to the other person¹. Credit reference agencies record financial connections where you have made an application for credit in joint names, hold a joint account or joint product, or tell the agency you are financially linked¹². Once the link exists, lenders can look at the other person's credit history when you apply for credit, even if you apply in your own name only³.

The ICO, the data regulator, confirms how far this goes: where partners are financially linked, the lender can have full access to your credit file in the same way it could if it were you applying for credit¹³. In other words, the other holder's missed payments and debts become visible to lenders assessing you, and can affect the outcome of your own applications.

The link is created by the joint account itself, not by marriage or living together. Which? makes the same point about joint savings accounts: a joint account can create a financial link with a partner which affects your own score, and their credit history is part of what lenders then see¹⁴. MoneyHelper's guidance on choosing an account for Universal Credit payments is blunter: only consider opening a joint bank account with someone you trust, as it could damage your credit score if they have poor credit, and you could be responsible if they run up debt¹⁵.

The link also survives separation and divorce. National Debtline notes that a financial association arises from joint credit applications, joint bank accounts or joint financial products, and continues after divorce or separation¹⁶. MoneyHelper's guidance on dividing the family home and mortgage during divorce makes the same point: if you have a joint debt with your ex-partner, your credit files are connected, and how you manage your debts will affect your ex-partner if they apply for credit, and vice versa¹⁷.

Closing the account does not remove the link. That takes a separate step, a notice of disassociation, covered in the section on closing an account below. The page on how current accounts affect your credit file goes further into how the link works.

FSCS protection: £120,000 per person, £240,000 for two

Joint accounts are eligible for FSCS protection up to the same limit of £120,000 per eligible person⁴. FSCS protects each holder, whatever the number of account holders, up to £120,000 in total across all accounts held with that bank¹⁸. So a joint account with two holders is protected up to £240,000¹⁹, as the Bank of England's explainer confirms: a joint account with two holders would be protected up to £240,000²⁰.

Two rules shape how this works in practice. First, the limit applies per banking group, not per account. If you have an individual account and a joint account within the same banking group, the £120,000 compensation limit applies across all these accounts, not to each separate account²¹. Second, a holder's share of a joint account is calculated by dividing the total balance equally between the number of account holders²². A £200,000 joint account between two people is treated as two deposits of £100,000 each, both within the limit.

The limit is per authorised firm, so money spread across two separate banks gets two separate limits. The FSCS website has a protection checker where you can confirm what is covered²¹. The page on FSCS protection for current accounts covers the scheme in more detail, including what happens when a bank fails.

Tax on interest: usually split equally

Any interest earned in a joint account will usually be split equally between each person, with tax only due if a share is above the annual allowance¹. Which? reports the same treatment: tax on interest earned would typically be split 50:50 between joint account holders²³. HMRC's own form P53Z instructs joint account holders to enter only their share, usually 50%, of the interest received²⁴.

Each holder then pays tax on any interest over their own allowance at their usual rate of Income Tax²⁵. The split matters because it can work in a couple's favour: two allowances are available between the holders rather than one, and a holder whose own allowance is unused pays nothing on their share. The page on interest on current accounts and how it is taxed explains the allowances themselves.

Where all the money in the account belongs to one holder, the position changes. You would need to let HMRC know all the money is one person's for it to treat all the interest and any possible tax bill as that person's responsibility²³.

Interest that exceeds your allowance does not always require a self-assessment return. HMRC can issue a Simple Assessment letter where there is tax to pay on interest on savings or dividends, and it has urged customers not to ignore these letters²⁶. If you receive one, the tax is calculated for you and paid directly, rather than through a return.

When the account is frozen: disputes, debt and loss of capacity

There are three common reasons a joint account stops working normally: a dispute between the holders, action by a creditor, and the loss of mental capacity by one holder.

Disputes between holders. If you and the other holder fall out, you can ask the bank to register a dispute and cancel the mandate, which freezes the account until everyone agrees how to split the money¹. This is the main protection each holder has against the other emptying the account, and the narrow page on freezing a joint account after a separation covers the process step by step. Banks including Barclays can also remove you from joint accounts or freeze joint accounts where there is abuse, and Bank of Ireland UK can freeze joint accounts²⁷.

Creditor action. In Scotland, if a creditor arrests money in a joint account, the bank will normally freeze the full amount, but you may be able to argue the creditor is not entitled to all of it. The creditor is entitled to the full amount only if the account holder in debt paid in all the money, the debt was incurred jointly, or the account is in the joint names of a couple with equal liability for the debt²⁸. National Debtline's guidance on diligence notes the same effect: with a joint account, the bank will usually freeze the full amount in it, apart from the protected minimum balance²². Separate accounts in the same banking group might be treated as being with the same bank, so the protected amount is applied only once²⁸.

Loss of capacity. If a partner loses mental capacity, the joint account could be frozen unless there is a power of attorney in place. The bank might freeze it completely, or only allow essential payments¹. nidirect confirms that if you lose mental capacity and do not have a power of attorney, the bank may restrict the account to essential transactions⁷. A power of attorney set up before capacity is lost avoids this restriction; the page on third-party access to bank accounts explains how it works.

The Financial Ombudsman Service also deals with complaints about frozen accounts and blocked payments, including where the bank has acted because of unusual or suspicious activity, or doubts about whether the customer authorised a payment²⁹. If a bank freezes an account and you cannot resolve it with the bank directly, the ombudsman can look at the complaint.

What happens to a joint account when one holder dies

If an account holder passes away, the joint account will continue in the remaining names¹. The joint owner will usually automatically inherit any money in the account if you die⁵, and nidirect confirms that if you had a bank account in joint names, you can still usually use the account³⁰. NS&I's Direct Saver terms state that once the last surviving holder of a joint account dies, no more deposits can be accepted, the balance becomes part of the estate, and the account continues to earn interest³¹.

The tax position depends on your relationship. Unless you were married to or in a civil partnership with the person who died, you might have to pay tax on some or all of the money in the account¹. The money that came from the deceased will still count towards their estate for inheritance tax purposes²³. In general, you do not usually owe any tax on an inheritance at the time you inherit it³².

Inheritance Tax itself can be paid from a joint bank account if you held one in joint names with the deceased, paid to the account named HMRC Inheritance Tax, and you can claim it back from the deceased's estate³³. You may also be able to pay the tax using some of the deceased's assets, such as bank and building society accounts³⁴, and you can ask to pay in yearly instalments by saying so on form IHT400, though you must pay the tax in full once you have sold the deceased's assets, such as their house or shares³⁵.

Scotland treats joint accounts differently on death. Any money you put into a joint account still belongs to you when you die and becomes part of your estate, rather than passing automatically⁵. Citizens Advice Scotland sets out the detailed rules: if a joint account was held by spouses or civil partners and both contributed, it is presumed the money is held equally, and half the balance on the date of death is presumed to belong to the person who died. If only one person contributed, the balance would be held to belong to that person. A surviving holder might have to prove they paid in all the money for the account to be excluded from the deceased's estate³⁶. Where the holders were not married or in a civil partnership, the executor must establish how much of the account belonged to the person who died so the estate can be valued for inheritance tax, and if there are more than two surviving holders the bank will ask for a new mandate authorising future transactions³⁶.

If the account is overdrawn when a holder dies, the bank will stop transactions on the joint account in Scotland, and part of this debt becomes a claim on the estate³⁶. More generally, if you want to switch or close an overdrawn account, you need to arrange to pay off any remainder separately before you can do so³⁷. The page on what happens to a bank account when someone dies covers the wider process.

How to close a joint account or remove your name

You can close a joint account at any time, but any overdraft will need to be repaid first¹. Some banks need permission from all account holders to close it, while others let one person close the account unless a dispute has been registered¹. If you are removing your name rather than closing the account, the bank will need the agreement of the remaining holders, and the account continues without you.

Closing the account is only half the job, because closing a joint account will not remove the link to the other person from your credit file¹. The link is removed only by a separate step: when a joint account is closed, you can write to the credit reference agencies to request a disassociation from that individual³⁸. The agencies will act only if there is no other financial connection between you. National Debtline sets out the limits: if you still have a joint debt, there is no way to remove the financial link until the account is closed, repaid in full, or the ex-partner's name is removed. For a loan, only once it is repaid in full; for a bank account, removal is only likely if there is no overdraft to repay¹⁶.

The steps in order:

1. Repay any overdraft on the account, since closure is not possible while one remains¹.
2. Close the account, or have your name removed, with the agreement the bank requires¹.
3. Check whether you hold any other joint products with the same person, such as a joint loan or mortgage, since these keep the link alive¹⁶.
4. Write to the credit reference agencies asking for a notice of disassociation³⁸.
5. Confirm the link has been removed by checking your credit report.

If you are separating from a partner, the practical sequence is usually to deal with joint debts first, then the account, then the credit link, because the agencies will not remove an association while a joint debt is still live¹⁶. The narrow page on how to close a joint bank account covers the mechanics in more detail, and switching a joint bank account covers moving the account rather than ending it.

Joint e-money accounts are not bank accounts

Some app providers offer joint accounts without being banks. Monese states this directly: it is not a bank, so it does not technically offer joint bank accounts, but is an electronic money institution offering joint mobile money accounts⁴⁰. The distinction matters for protection. Money in a Monese joint account is protected by the EU Electronic Money Directive and UK Electronic Money Regulations 2011, and not by the Financial Services Compensation Scheme⁴⁰.

The product otherwise behaves in familiar ways. Both account holders have equal access to the money and are both responsible for missed payments, even if one person adds more than the other⁴⁰. There is no overdraft, so you cannot spend more money than you add⁴⁰. The account supports Direct Debits, local and international transfers, shared account details, balance and transaction viewing, up to 10 pots, and a physical contactless card⁴⁰. Opening one requires a personal Monese account in GBP or EUR, which can be opened with no credit checks, and the joint account itself is created by sending an invite from the app, with no new checks or applications⁴⁰. Personal Monese accounts are available to residents of any of the 30 countries in the European Economic Area or the UK⁴⁰.

The broader point applies to any e-money provider, not just this one. E-money firms must safeguard customer money rather than holding it as deposits, and the FSCS deposit protection described earlier in this page does not apply. The protection you get if the firm fails depends on whether the provider is a bank, building society or credit union, or an electronic money institution. The page on FSCS protection and e-money accounts explains the difference.