Why you must consider the pitfalls before agreeing to a joint bank account

But before you consider opening one, here are some things you might want to consider and chat with your partner about first:

1. Do you both have similar attitudes to money?

One person in the relationship may be more frugal with money while the other one may be more inclined to spend.

And remember that trust is vital when opening a joint account with someone. If your partner has been telling a few small fibs about their finances, now is the time to find out.

According to recent research for jobs website Indeed, nearly a fifth (18%) of people admit their partner doesn’t know how much they really earn.

The survey also found that 65% of people have experienced significant income differences with a partner. This isn’t necessarily an issue as long as you are in agreement about how your finances might be split in a joint account.

It’s important to remember that in general with a joint bank account, both account holders can withdraw and spend money at their own discretion, so the other account holder could potentially empty the account, or go overdrawn.

Some account providers may give the option that all holders have to sign to make a withdrawal, which could mean needing to visit a branch to take money out.

2. Are you happy for your finances to be ‘linked’?

Having a conversation with your partner about their financial history and any past credit issues could be vital.

This is because by opening a joint account, you’ll be creating a “financial association” between yourself and the other account holder.

As this will be noted on credit reports, it could be taken into consideration when you’re making an application for credit, such as a mortgage or other loan. If your partner has a poor history, for example, lenders could view this as potentially affecting your own ability to repay debt.

3. What if you were to split up?

While it may not be romantic, it could be worth having a conversation about what would happen to money in the account if you no longer wanted to hold it jointly. This could help to avoid any differing expectations about how the cash might be split.

If things really turn sour, you may need to ask the account provider to freeze the account so that no one has access to it while the situation is sorted out.

And, in the longer term, if you no longer have any financial associations with the other person, you could ask credit checking firms to remove them from your credit report. You may be asked to provide evidence that you are no longer associated.

In other personal finance news, it was revealed this week that UK inflation jumped more sharply than expected at the start of the year, posing a dilemma for the Bank of England as it considers further interest rate cuts amid weak economic growth.

The Office for National Statistics (ONS) said on Wednesday that Consumer Prices Index (CPI) inflation rose to 3% in January from 2.5% in December.

This marks the highest reading since March last year.

Plane fares, rising food costs and a sharp jump in private school fees all contributed to the rise in living costs.

The latest reading was higher than predicted by analysts, who had forecast a rate of around 2.8%.

As a result, City traders reduced their bets on interest rate cuts later this year, as the Bank of England seeks to bring inflation back down to its 2% target rate. Economists have predicted that interest rates will come down further from their current 4.5% level, but that there could be a slowdown in cuts after three in the past six months.