Summary: This article explains some of the benefits of having a joint bank account and working together with a partner to achieve the best from savings.
For many, the thought of having a joint bank account creates the perception that they will lose financial independence. However, it can make complete sense when budgeting and saving for the future.
Reducing the potential for overspending
By having a joint account, it is difficult not to be open about finances. This can help prevent an individual getting into financial difficulty as it will be more difficult to hide overspending. This in not to say that it can't happen, especially if both partners are prone to spending money, but being open and honest about finances can help reduce the risk.
Benefit from joint savings and financial products
There are many instances where joining together on various products can be of benefit (and potentially save some money). An example of this could be car insurance. Rather than getting individual insurance, a joint policy can sometimes workout considerably cheaper. Joint savings accounts can also be beneficial as there will be double the income going into it.
Reduce tax on savings
If one partner earns less (or is a lower taxpayer), it is worth putting any savings accounts in their name as the tax on the interest will be lower. It is also worth noting that both partners have an Individual Savings Allowance (ISA) that they can benefit from (currently £11,520 per person).
By working together and keeping on top of finances, a couple will be able to reduce the danger of getting into financial difficulty through overspending and potentially facing the possibility of bankruptcy or an Individual Voluntary Arrangement (IVA). It is important to be open about individual credit cards in order and to support each other if overspending is an issue. Furthermore, by utilising tax breaks and allowances, the most can be gained from savings.