4 Shared bills and a household bank account
Some shared households set up a separate bank account for settling the bills.
This can be very useful: each utility service and other essentials (gas, electricity, water, internet) is normally set up in the name of just one of the tenants, so a household bank account helps make sure everyone contributes fairly when it comes to paying the bills for these services.
The account can be used to settle these essential bills using through direct debits or standing orders. It can be also used to settle general household costs, for example cleaning materials.
It’s probably best not to use the household bank account as a way to settle the rental payments. Each housemate should settle these direct from their own accounts, given that each has entered into their own agreement with the landlord.
To pay for these outgoings each person in the shared tenancy would be required to pay in a monthly amount to cover their share of the joint costs.
At the end of the tenancy any funds left in the account can be shared between the tenants. If there are any shortfalls on the shared costs, make sure that the individuals concerned are chased and the money secured before people leave at the end of the year.
Ideally the household account should have at least two joint signatories, who can access details. This means that the responsibility of looking after the account is shared and there’s at least a second pair of eyes monitoring movements on the account.
Once the tenancy has ended and all sums of money into and out of the account have been resolved properly the direct debits and standing orders can be cancelled and the account closed.
Activity 4 A joint account – pros and cons
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