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6 steps to financially separate from your ex
Breaking up can be a distressing process, but it’s not just the emotional side you need to think about.
47% of people who have ended a long-term relationship don’t know what to do to financially split from their ex, according to data from credit reference agency Experian.
Here, Which? explains six steps to ensure your personal finances go their separate ways after a break-up.
1. Take stock and check your credit report
The first step is to work out what’s joining you and your ex together financially.
So start by creating a list of your joint finances and assets you own that will need to be divided. This could include bank accounts, debts, utility bills and assets like a car and home that you need to thing about in the short term.
Check your credit report at Experian, Equifax and TransUnion to spot any financial connections you might have missed or forgotten about.
- Find out more: how to check your credit report and score for free
2. Close your joint bank account(s)
A joint bank account is often set up for practical reasons such as making shared bills easier to manage, but it also creates a financial link between you and other account holders - so must be dealt with as a priority if a relationship goes sour.
Most joints accounts will be set up as 'either-to-sign', where each account holder can give payment and withdrawal instructions independently. Therefore, your ex will still be able to access the cash in a joint account and may be able to increase an overdraft without your permission - which you will be jointly responsible for.
Speak to your ex to come to an agreement on how to share the money left in a joint account. You also need to deal with any overdraft debt and which standing orders and direct debits can be cancelled or redirected.
If you need to keep an account open for a little while longer, your bank might be able to reduce what can be done on the account, such as suspending online banking and changing the terms of the account such as the right to request an overdraft.
What you need to close an account can vary. Halifax, for example, only needs an instruction from one of the account holders to close an account. Meanwhile, HSBC states 'signatures from all parties are required.' Contact your account provider to find out exactly what you’ll need to do.
If your joint account was your main account, then you will need to open a new bank account for yourself. Check our best and worst banks guide for more information on the providers that Which? recommends.
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3. Split your joint savings
Experian found 52% of people who have ended long-term relationships said they shared a joint savings account with their former partner.
If you and your ex-partner have any savings together, you should hopefully be able to agree on how to share them.
If not, how the law treats your right to money in any joint account, including savings accounts, depends on where in the UK you live.
In England and Wales, money in joint accounts belongs to whoever paid it in. But a partner who hasn’t contributed to a joint account could make a claim for a share of it, though they would need to prove the intention of the account was to have a shared fund. If you’re married or in a civil partnership, however, money in a joint account belongs to both of you equally.
In Northern Ireland, money in a joint savings account post break-up belongs to each of you equally (unless a court decides differently).
In Scotland, however, any money a married couple or those in a civil partnership have in a joint savings account – that was opened during the marriage or civil partnership – belongs to the account holders equally. If you can prove that you paid in more money, you might be able to claim more.
- Find out more: how to find the best savings account
4. Check your rent or mortgage options
Another important financial tie to unravel is a joint tenancy if you were renting together or a joint mortgage if you've bought a property together.
Renting with a joint tenancy agreement
If you were living with your ex and were both named on the agreement as tenants, you’re both liable for the rent until your agreement ends.
If you're on a fixed term, your tenancy agreement should say how much notice you need to give your landlord before you leave the property. You’re responsible for paying rent for your entire fixed-term tenancy unless there is a break clause in your contract.
Contact your landlord or the managing agent and let them know of your intention to move out. Discuss what this will mean for the tenancy agreement and how you can end your liability towards it.
- Find out more: tenancy agreements explained
Homeowners with a joint mortgage
If you've bought a property together you would probably have taken out a joint mortgage.
Each person owns an equal share of the property with a joint mortgage. This means if you split up, you each have the right to remain living in the property, and you’re equally responsible for the mortgage repayments regardless of whether you both live there.
You have several options to break this financial tie, but one of the simplest ways is to pay off the mortgage by selling the property. Another alternative, if you can afford the repayments alone and can raise the capital, is to buy out your partner's share of the property.
If you’re experiencing financial difficulty after a separation, contact your lender immediately.
- Find out more: selling a house in a divorce
5. Remove named credit card holder rights
You can't take out a credit card in joint names. Instead credit cards are held in one person’s name, and another person can be a named card holder with permission to spend.
This means credit card companies can only enforce payment against the original account holder, and not a named secondary card holder, and it cannot be closed by the secondary card holder.
You can either ask your ex-partner to give you the card back, or contact the card company and find out how to block the card or remove your ex from your account.
- Find out more: how to pay off your debts
6. Check your credit report again
Your credit report could be one of the last things keeping you tied to your former partner.
After closing any joint accounts or credit agreements, your credit report should reflect that you no longer have a financial relationship.
If it doesn't, contact the credit reference agency responsible (this may be Experian, Equifax or TransUnion) to remove your ex-partner from your report to ensure any future financial decisions they make won’t affect you.
- Find out more: how to check your credit report for free