Joint Account for Bills: Pros, Cons and How to Set One Up

When two people share a home, they share the bills: rent or mortgage, council tax, energy, water, broadband. A joint account just for bills is one of the simplest ways to pay them. Each of you pays in an agreed amount every payday, and every shared bill comes out of that one account.

It works well for many couples, but it has trade-offs worth knowing before you open one.

How a joint bills account works

1. Open a joint current account with one bank. Both of you are named account holders.
2. Point every shared bill at it. Move the Direct Debits for rent, council tax, energy, water and broadband to the joint account.
3. Each of you pays in an agreed amount by standing order on payday.
4. Keep your own accounts for everything personal. The joint account is only for the shared bills.

Council tax is a good example of why this helps. GOV.UK says spouses and partners who live together are jointly responsible for paying the bill, so paying it from a shared account matches how the council sees it.

How much each of you pays in

Start by adding up the shared bills for a month. Then pick a split:

• Equal halves: simple, and fair if you earn about the same.
• By income: each person pays the same percentage of their pay. Our guide to splitting bills when you move in together has a worked example.

A worked example with made-up figures: shared bills of £1,400 a month, split by income where one of you earns 60% of the total and the other 40%, means paying in £840 and £560. Round each up a little, say to £860 and £580, so the account has a small buffer for price rises.

The trade-offs to know first

Either of you can usually take money out

StepChange says either person can withdraw whatever money they want from a joint account. That is fine when you trust each other and agree on the rules, but it matters if the relationship changes. Monzo’s terms say that if the bank becomes aware of a disagreement between account holders, it may freeze the account until you both agree to unfreeze it.

You are both responsible for an overdraft

StepChange says you are both responsible if the account is overdrawn. Monzo’s joint account terms put it this way: you are individually and jointly liable, which means the bank can ask both or either one of you to pay back any money you owe. If you open a joint bills account, consider keeping the overdraft off or very small.

Your credit files become linked

Opening a joint account creates a financial association between your credit files. Monzo says things that happen on the joint account, like missing a payment or going into an unarranged overdraft, can affect each person’s score, and that if you apply for a joint loan, overdraft or mortgage, lenders will look at both your credit scores. StepChange adds that missed payments on joint debts are marked on both credit files.

If you split up

Plan for this while things are good, because it is much easier to agree on rules early:

1. Move the Direct Debits off the joint account so bills keep getting paid.
2. Clear any overdraft. Monzo says either of you can ask to close the account, but it can only be closed when it is empty.
3. Close the account once it is empty.
4. Remove the financial association. Monzo says to close any joint financial products first, then ask each credit reference agency to end the financial association, and that this is free.

A joint account or two separate accounts

Some couples prefer to keep separate accounts and split the bills between them, with one person paying the energy and the other the broadband, for example. That avoids the overdraft and credit-file link, but it means keeping track of who has paid what. Our guide to a separate bank account for bills covers the one-person version of the same idea.

Keep both of you in the loop

With a joint account, the risk is that one person handles the bills and the other has no idea what is due when. A shared bill list with every amount and due date keeps you both informed. A bill tracker like Billo keeps every bill and date in one list and reminds you 3 days before each is due; it does not split amounts between people, so agree your split first and use the list to see what is coming out.