Third-party mandate or joint account for someone helping with your money

If you need someone to help with your day-to-day banking, there are two main routes. A third-party mandate gives someone you trust access to your bank account so they can pay bills, take out money and make transactions in your name, while the account and the money stay yours. A joint account is different: everything in it is shared by both parties, and both have the legal right to use the money as they wish¹.

The choice matters because the two arrangements carry very different consequences. With a mandate, the account does not become a joint account, and the person helping you does not gain ownership of your money². With a joint account, everyone named on it is equally responsible, can withdraw cash or spend whenever they like, and can be asked to repay overdraft borrowing run up by the other holder³.

A mandate is designed for temporary help: convenience, travelling and needing help managing your account until you return, or being injured, ill or have a disability. It is not designed for long-term help with your finances, planning for future loss of mental capacity, or giving full control of your accounts to someone you trust⁴. If any of those apply, a power of attorney is the route to look at instead.

What a third-party mandate lets someone do

A third-party mandate is a document telling your bank that someone you trust is allowed to run your personal accounts⁷. It gives that person the authority to run your bank account, but no other financial arrangements⁸. In practice, the person you name will usually be able to take out money in your name, make payments in your name and make other transactions in your name².

The scope is everyday banking. One bank describes it as telling them you would like another party to have access to your accounts to carry out everyday banking transactions while in branch or over the phone, such as making payments, or just to allow disclosure of account information on your banking or savings accounts⁹. Another describes its purpose simply as sharing information¹⁰.

You can control how much access to give. Setting up a third-party mandate gives someone else access to your bank account, and you can specify how much access to give⁵. The account holder is the person who sets it up¹⁰, and it needs to be signed by both the account holder and the third party¹¹.

There are firm limits on what a mandate holder can do. They cannot complete internal transfers to their own account, withdraw cheques payable to themselves, access the account online, change the account holder's name or address, close the account, or apply for new accounts on behalf of the account holder¹¹. They also will not be allowed to arrange a formal overdraft or open or close an account⁶. One bank sets out the same exclusions in its own words: a third-party authority holder cannot open or close accounts for you, change your address or personal details, or apply for, change or remove an overdraft, loan or mortgage in your name¹².

A joint account makes the money theirs too

A joint account is owned by two people, and you can change an existing account to a joint account or open a new one¹³. It normally allows two or more people to receive payments, pay by debit card, transfer money and manage the account, depending on the bank³. Either person can withdraw whatever money they want from it¹⁴, and both account holders can manage the account and withdraw cash⁷.

That shared access is the point, and also the risk. Everyone named on the account is equally responsible and can withdraw cash or spend whenever they like³. You are each liable for the other's debts⁵, and you are both responsible for any overdraft on the account¹³. If both your names are on the agreement, you are both responsible for the debt, and if the other person stops paying, the credit card company can make you pay the full amount¹⁶.

Ownership of the money is not always as simple as the account name suggests. In England and Wales, money in joint accounts belongs to whoever paid it in, but a non-contributing partner could claim a share if they prove the account was intended as a shared fund; if married or in a civil partnership, money belongs to both equally¹⁷. Most joint accounts are set up as 'either-to-sign', where each account holder can give payment and withdrawal instructions independently¹⁷.

Tax follows ownership. Any interest you earn in a joint account will usually be split equally between each person, with tax only due if a share is above the annual allowance³. On a tax return, if you have a joint account you enter your share, usually 50%, of the interest received¹⁸. Each account holder would be liable to pay any income tax and inheritance tax as well as being jointly liable for any debts⁶.

Third-party mandate or joint account: how each one works

The core difference is control. With a joint account everything in the account is shared by both parties and both have the legal right to use the money as they wish; with a third-party mandate the account and the money stay in the owner's control¹.

A mandate is tied to the account it names. It can apply to one or all of the accounts, depending on the bank's terms¹¹, but you cannot transfer a third-party mandate to another account or bank². If you have an existing mandate registered and you open a new account, you will need to request a new mandate to include the new account¹. Some banks describe access as covering a single savings or current account¹⁹.

A joint account creates a lasting financial link. Opening a joint account adds a financial link to the other person, so companies look at both credit histories and a poor history might lower chances of acceptance³. A joint account can create a financial link with a partner which affects your own score²⁰. If you take out a joint mortgage, you create a financial link between yourself and your fellow co-owners, and if one of you runs into financial problems this could affect everyone else's credit rating, which could make it difficult for you to borrow in the future²¹.

When a mandate suits you, and where it stops

A mandate fits short-term, practical help. Banks describe it as appropriate when you need temporary help with account management for convenience, when you are travelling and need help managing your account until you return, or when you are injured, ill or have a disability⁴. If your benefits are paid into a bank or building society account, a third-party mandate will let someone else collect them for you²². Most banks, building societies or other account providers allow a third party access to your account, for example with a second card²³.

It is not appropriate when you need long-term help with your finances, when you are planning for future loss of mental capacity, or when you want to give full control of your accounts to someone you trust⁴. A third-party mandate is for handling the account of someone who has mental capacity and is not appropriate if the account holder is losing the ability to make relevant decisions themselves²⁴.

The hard stop is capacity. Third-party mandates end when the account holder loses mental capacity⁶. Both power of attorney and third-party mandate rights cease on sole accounts once the account holder has passed away²⁵. A mandate also does not give the person the legal right to make decisions about the other person's finances².

If you are going into hospital, a mandate can cover the gap while you are unable to deal with bills yourself. If you are going abroad, it covers the period until you return. Where the need is longer or the person's ability to make decisions is in question, the options are a power of attorney or, failing that, a deputyship through the Court of Protection. Nationwide, for example, lists getting a third-party mandate, power of attorney or Court of Protection Order as the routes available²⁶.

Setting up a third-party mandate with your bank

The account holder fills in a form giving the other person permission to manage the account. This is known as a third-party mandate, and most banks have one on their website²⁷. All banks should offer this², though your bank does not have to agree to allow a third-party mandate².

The process in outline:

1. The account holder asks the bank for its third-party mandate form, usually available on the bank's website²⁷.
2. Both the account holder and the third party sign it¹¹.
3. The bank registers the mandate against the named account or accounts¹¹.
4. If you later open a new account, request a new mandate to include it¹.

Some banks ask everyone to attend in person. One high street bank requires all existing account holders and all people being added to come into a store together when adding a card holder, joint account holder or third-party mandate²⁸. Others accept postal or online instructions. If the account holder cannot get to a branch, ask the bank what alternatives it offers.

The person helping you can often have their own card and PIN. When you set up a third-party mandate or joint account, the person helping you can have their own card and PIN¹³. One bank's terms say a third-party authority holder can use your card and PIN, but you can ask them to send their own¹². Where third parties can only make decisions jointly, one bank will not give them access to a debit card, telephone banking or online banking²⁸.

Mandates on an account you already share

If the account is already joint, both holders have to be involved. Both holders of the joint account need to agree and sign the third-party mandate form¹. One bank asks for jointly signed instructions from you and any other parties to the joint account²⁸. A third-party withdrawal mandate or letter of authority can be applied to a joint account as long as both account holders are happy for the third party to support the running of the account²⁹.

There are limits on numbers. For joint accounts, a maximum of two third parties will be allowed per account, and there must be no more than one third-party mandate per account holder¹¹. A third-party mandate can only be requested by an account holder¹¹.

Joint account holders are not classified as supporting third parties. They have the right to financial information on their joint account, but not about the general finances of their joint account holder²⁹. The Data Protection Act allows your lender to give you information about payments made by a joint account holder, but does not force them to do so³⁰.

If the relationship breaks down, a joint account can be frozen. You can ask the bank to register a dispute and 'cancel the mandate', freezing the account until everyone agrees how to split the money³. One bank sets out the same process: if there is a dispute between the account holders you can cancel the joint account mandate, neither of you will be able to use the account until the dispute is settled, and each is liable for any debt on the account³². Normally, both parties must agree for a joint bank account to be closed³³.

The risks of giving someone access to your money

The risks differ by arrangement, and they are worth setting out plainly.

With a joint account, the other person's finances become entangled with yours. 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 debt³⁴. If one of you runs into financial problems, this could affect everyone else's credit rating²¹. You can only ask a credit reference agency to disassociate you from a joint account if the joint account has been paid off in full and you no longer live with the other person³⁵.

Creditors can reach joint money. If the account is a joint account, you cannot get a third party debt order unless all the account holders owe you money³⁶. In Scotland, the creditor will be entitled to the full amount if only the account holder who is in debt paid money into the account, the debt was incurred jointly, or the account is in the joint names of a couple with equal liability for the debt³⁷. If you are bankrupt, half of any credit balance in a joint account is paid to the official receiver³⁸.

Banks can also take money from a joint account to cover one holder's debt. The right of set off does not allow transfers from your joint account to a sole debt in your name, or from your joint account to another joint account you have with a different person³⁹.

With a mandate, the risks are narrower but real. The person can take out money and make payments in your name², so the access you give is the access they have. A mandate holder cannot complete internal transfers to their own account or withdraw cheques payable to themselves¹¹, which limits some routes, but not all. If you are leaving an abusive relationship, using a joint account after you have left could give the abuser access to your location, for example through cash machine locations or on bank statements⁴⁰. If you are opening an account after previously holding a joint account with an abuser, be careful not to link the accounts, as this may make your details visible to the abuser; opening an account with a different bank avoids this risk⁴⁰.