Martin Lewis: Financial abuse, joint accounts and managing money within relationships

Contents of this blog

• What is financial abuse?
• What are the signs of financial abuse?
• Help is available
• Financial rights within a relationship
• Video: Martin and 'Sarah' on This Morning
• What should I do if my partner is trying to push me into a financial decision?
• Joint accounts – are they sensible?
• Savings accounts, mortgages, credit cards – product-by-product rights

What are the signs of financial abuse – where to get help?

It can be difficult to recognise. It can start with innocent requests for money, taking cash from your purse/wallet without asking, or even a caring suggestion that you stay at home or look after the children while they go out to work.

Of course, on their own these may be perfectly normal, kind and acceptable. However, if a partner starts to become aggressive, coercive or manipulative, whether physically or psychologically, to deprive you of your independence, then these are red flags.

If it's happening to you, by someone you love, it can be confusing and tough to recognise and accept. However it's worth considering talking to, or getting web guidance, from:

• The National Domestic Violence Helpline on 0808 2000 247 in England, 0808 801 0800 in Wales, 0800 027 1234 in Scotland and 0808 802 1414 in Northern Ireland. This is run in partnership with Women's Aid and Refuge.
  
• Men's Advice Line on 0808 801 0327 and Men's Advisory Project Northern Ireland on 028 9024 1929.
  
• National LGBT and Domestic Abuse helpline on 0800 999 5428.

These charities are there to support you emotionally and practically – so don't be scared to call. Though again, a reminder that if you are in immediate danger, call the police on 999.

And of course, it may not be you, you may suspect it is happening to someone you care about. It is likely you'll wrestle with whether to 'interfere' or not. Yet there are tell-tale signs such as...

• They don't have money to pay for bills and food.
• They can't explain their lack of access to money.
• Changes in their standards of living, for example not having things they normally would, or not going out as they would before.
• They don't have debit or credit cards and can't check their bank account balance.
• They seem socially withdrawn and different from before.

If you spot this and are worried but don't know what to do, then you can contact the helplines above to discuss it. You can also download the free Bright Sky app for more advice on how to spot the signs of domestic abuse, and how to support someone you’re concerned might be a victim.

Your financial rights within a relationship

This is a complex area, and in some cases you may need legal advice. However, I'm going to give a broad-brush explanation to give you an idea.

Are married couples' finances automatically linked?

Yes and no. When you get married or enter a civil partnership, legally you can still have separate finances.

Nor does marriage automatically link your credit files. To do that, you need to have a joint product together – a mortgage, current account or loan, and sometimes gas and electricity bills (see How to boost your credit score). However, all that means is when assessing your credit worthiness, they can take into account the other person's credit file too.

However, in the eyes of the law your assets – wealth, property, cars – may be deemed to be shared, so that if you divorce, a court or arbiter may divide them as it feels is appropriate for current and future needs, which may not be in line with whatever is in each individual's name or what they've earned.

Are finances linked for co-habiting couples who aren't married?

If you're not married and are just co-habiting, your assets are independent.

Even if you split up, there is usually no legal obligation to pool your assets and divide them. If it is in your name, you own it. The rules are complex though, so legal advice is worth having, and things vary subtly across the UK nations.

• England & Wales: If the home you live in is in the name of your (ex-)partner, you may be able to claim 'beneficial interest' in court if you've paid towards the mortgage or towards improvements or an extension.
  
  
• Scotland: You may be able to claim some assets if you've been left worse off as a result of the relationship. For example, if you were persuaded to give up work by your partner, and sell your property and move in. You have a year from when you separate to make a claim.
  
  
• Northern Ireland: If the home belongs to your partner, you are entitled to receive back any money you can prove you've paid – towards the mortgage, for example – providing there is enough equity in the property.

It is worth noting that for benefits, social security assessments, eligibility for care and assessment of student loan maintenance grants, the couple's or household’s combined finances are usually looked at. 

What should I do if my partner is trying to push me into a financial decision?

You shouldn't have to do anything you are not comfortable with. However saying no in a safe manner may be very difficult, especially if your partner is violent or aggressive.

If you have the conversation with your partner and they have a serious issue or become aggressive, it is a clear warning sign. If you're scared to have the conversation in the first place, that's an even stronger sign – please speak to one of the charities above.

If it's safe to talk with your partner and you're not frightened of their reaction, then explain clearly that at the moment you'd prefer to keep your finances separate, it's too early, and you're naturally conservative about things.

What should I do if my partner wants me to give them money?

If you can't afford it, you're new in a relationship, or it makes you uncomfortable, then if you can, just say no. You could try explaining this could make things awkward and you don't want to risk ruining the relationship. To offset it, so it's less about you, why not tell them you read it on this website or in a magazine?

If you're going to do it, if you can write down the date, amount and purpose of the loan, and if it's expected to be repaid, then ask them to sign it. That way you have evidence there was a contract between the two of you (again explain that you've read this is the appropriate way to do it). Better still, if it is for a larger amount get a solicitor to draft up a contract – this would help in court if ever you wanted to pursue the cash.

If not, at least send an email to yourself or a trusted friend – so that it is time stamped – with all those details in, explaining that your partner had promised to repay you (assuming it is true) or that you felt forced into doing it – so you have contemporaneous notes which may later be accepted as evidence if needed.

Worried your partner has taken out debt in your name without telling you?

To monitor it, check your credit report (for free) and look to spot applications and unusual products that you didn't apply for. If this has happened, it is fraud and you most likely won't have to pay it back. Report it to the police and your bank.

You should also ask fraud prevention service CIFAS to mark your credit file, so if any other financial products are applied for in your name it'll flag up and contact you before processing it. You can do this by filling in its Protective Registration form online. This service costs £25 for two years, although the fee can be waived in cases of hardship or circumstances such as domestic abuse.

Joint accounts – are they sensible?

Of course within the context of financial abuse, there are obvious and significant concerns over joint accounts. However, joint bank or savings accounts aren't necessarily a bad idea for those in long-term, loving, non-abusive, trusting and stable relationships, if that way of managing money works for you.

Though if the relationship changes, even if it is not abusive, separating joint accounts and whose is what can be a cause of great stress and friction.

In a joint account, one partner can LEGALLY take all the cash.

The nature of joint accounts means one partner can have access without the other's permission. If they then withdraw all the money, they are allowed to.

If you're worried about this, ask your bank to change the signatory rules, so both signatures are needed to release money. This may stop you having access to a debit card and access to online banking though.

Keeping things separate is also a good management tool if you have different financial personalities – a spender and a saver – as it can reduce relationship friction.

It's also worth reminding you, as I explained earlier, getting a joint account links your credit files, so if one has a poor credit score it is best avoided, or it can bring you both down.

I'd be especially wary of setting up a joint bank account (other than just for joint bills) too early in a relationship – especially if they are pressuring you or trying to convince you that it is a way to show love.

Give any new relationship time and really get to know the person before you commit to joining your finances or giving them money. Maybe test it out by asking a sensible close friend whether they think it is time – their distance may be a valuable perspective.

As society has changed, so have the social norms about banking.

Many people now get together later and we no longer have the more traditional male bread-winner, female housewife roles (indeed marriage is no longer exclusively heterosexual).

Perhaps the biggest change in this context is that more women are now financially independent when they enter into a relationship, and throughout the life of the relationship.

It's therefore no surprise that the number of people who pool all resources into one account are diminishing. This site conducted a poll in June 2019 that shows a stark difference between age groups...

Joint bank account use by couples (24,046 votes)

Under-35s:
- 21% have a joint bank account for everything.
- 56% have a joint account just for bills.
- 18% have totally separate finances.

Age 35-49:
- 37% have a joint bank account for everything.
- 41% have a joint account just for bills.
- 17% have totally separate finances.

Age 50+:
- 54% have a joint bank account for everything.
- 29% have a joint account just for bills.
- 12% have totally separate finances.

Savings accounts, mortgages, credit cards – product-by-product rights

It's important to understand how financial products work when taking them out, as well as knowing what would happen if you take them out with, or on behalf of, a partner you later separate from.

While much depends on lenders' own policies, if you are being financially abused, it is best to communicate to financial firms that you are in a vulnerable position. Most now have vulnerable customer teams that can help.

There is a voluntary code of practice aimed at supporting financial abuse victims which banks including Barclays, Co-op, Halifax, HSBC, Lloyds, Nationwide, NatWest, Santander and TSB are signed up to. If your bank isn’t one of those, do check on the UK Finance’s website to see if it has joined.

Staff are then supposed to have had training to spot and deal with financial abuse sensitively and appropriately. They should also have a special ‘vulnerable customer’ department you can speak to, so you don’t have to tell several different teams. 

And thankfully, from 2023, the code will be expanded to include new measures, such as ensuring victims of financial abuse are never asked to contact the perpetrator in relation to their case.

Plaudits to banks, including Barclays and HSBC, that have also set up special systems, which allow those who have been financially abused to request a generic sort code – meaning accounts aren't linked to a specific branch – to stop an ex-partner knowing your whereabouts if they need to make payments.

Many also let you change your postal address to a PO Box or refuge centre, so your partner can't track your address.

It's also worth considering changing your passwords, card PINs and login details so nobody can access your accounts. And do try to collate all your financial paperwork and keep it secure and away from anyone who may be financially abusing you. If you need more help then the Surviving Economic Abuse charity can give more support.

Now on to each main product type:

• Mortgages: If you have a joint mortgage, you are both responsible for the entire repayment (in other words, it's not half each, you are each responsible for all of it), so if one doesn't repay, the other should.
  
  If you're separating, a lender may allow you to move the mortgage into one name only, yet do that and the other person may lose their claim on the house.
  
  If you are unable to repay, then talk to the lender as soon as possible (as well as the debt counselling agencies below). Over the years, political and public pressure means lenders are now much more shy of repossession.
  
  They should be able to put systems in place to help, but the sooner they know of the problem the better – and let them know if you are a vulnerable customer.
  
  
• Credit cards: There's no such thing as joint credit cards. One person is the cardholder, and it's their account, the second cardholder just has access to a card to use it – but it is not their debt.
  
  If someone has a second card and you don't want them to have it, simply ask the card firm to remove them – as it's your debt, it's your right.
  
  The same is true if you have agreed to shift your partner's debt onto your card. It's your debt and you're responsible. Even if you and your partner have made an agreement between you that they will pay, that's not the card firm's business. If it needs enforcing, you will need to go to court.
  
  
• Personal loans: A loan in your name is your sole responsibility, even if it was taken out to benefit both. If it's in both names, then you are both jointly liable. If your partner refuses to pay it, you still have to, otherwise the default will affect both your credit ratings. Again though, if this is the case explain to the bank about the financial abuse as soon as possible.
  
  If divorcing, a judge/mediator can't transfer debt from one partner to the other. So if the debt is in your name, you'll likely have to pay it back. Though a judge may award you more money to repay it when the finances are split.
  
  
• Universal credit: Couples who live together are paid a joint universal credit payment into one bank account (either a single account or joint account).
  
  If you're worried your partner will take all of your payments and leave nothing for you (and your children), you can request for the payment to be split, so it's paid into two separate accounts.
  
  Talk to your work coach at the local Jobcentre (who should all have someone trained in domestic abuse) or call the universal credit helpline on 0800 328 5644 and ask for an 'alternative payment arrangement'.
  
  
• Other contracts such as mobile phones: If the contract is in your name, it’s generally your responsibility, so think very carefully before signing anything for someone else. So if you take out a mobile phone contract for your partner, you alone are responsible for keeping up with the direct debits – and your credit file may be impacted if you don’t – even if you’ve separated from your partner and they’ve stopped giving you money for the phone.
  
  If this happens, speak to the company, get it to freeze or terminate the account. It’ll likely cost you less in the long run than your former partner racking up huge mobile bills. Alternatively, as the phone is legally yours, you could also try reporting it as stolen if your ex won’t give it back.
  
  Of course, if you were forced against your will to take out the phone contract (or another contractual obligation) by your partner, this constitutes financial abuse and should be reported to the phone company and the police. Similarly, if your partner posed as you in order to take out a financial product, this is fraud and should also be reported.

Unhappy with a bank/lender's decision?

Under financial rules you have a right to be 'treated fairly'. If you don't believe this has happened after you've asked a firm for help, then make a formal complaint and go to the free financial ombudsman (see our Using the Financial Ombudsman guide).

Normally you have to wait eight weeks to do this, but in the event of an emergency you can ask the ombudsman to expedite it (ie, speed it up). In which case, it's best to call its helpline on 0800 023 4 567.

Once you've separated your finances, disassociate your credit files

If you've had any joint products, then you will likely be financially linked on credit files – so when you're assessed, their finances will be too.

Once your finances are separate (close down your joint accounts), contact all three credit reference agencies – Equifax, Experian and TransUnion – and ask them to put what is called a 'notice of disassociation' on your file.

It then lets lenders know you're no longer financially linked to your ex-partner. You won't normally need to prove this, the credit reference agency will the do background checks to ensure that you've no longer got any joint products.

If you are still financial linked, but only by a joint defaulted debt, or a debt that has had a county court judgment against it, you can still ask for a disassociation as credit reference agencies don't count these as financial links.

The same is true if the only remaining link between you and the other person is a joint mortgage – and you have been living apart for six months. This is a concession made by credit reference agencies to help people move on.

Struggling with unaffordable debt? 

If your debts aren't manageable, then it's always best to seek non-profit, one-on-one debt management help from Citizens Advice, National Debtline, StepChange, and if you need emotional support too, Christians Against Poverty.

They are there to help, not to judge – the sooner you contact them, the easier it often is to sleep at night. More info on this in our Debt crisis help guide.