Financial tips for couples moving in together

More than three million people in the UK cohabit and it’s the fastest type of living arrangement according to the Office of National Statistics. As well as planning the housewarming party, it’s important to consider the financial side of moving in together Don’t leave it until you have the keys in your hand – try to do this beforehand so that you can gauge if you’re financially compatible.

Who pays what?

You and your partner probably might not earn the same salary, so decide how to split your household expenses based on who earns more or less. It might be that one pays rent or mortgage, and the other takes care of the bills. Or perhaps you want to split everything 50/50 regardless of earnings. Whatever the decision, it’s important to talk about it at the outset – and to ensure that you’re both happy with the outcome.

Be organised

Having one account that pays all the bills is the simplest option. A joint account makes things easy as it means you can each pay in your share and it’s taken care of. You could agree to pay in enough cash to cover your end of the deal and a little extra as a slush fund to cover unexpected expenses. This way if a bill comes along you won’t have to find the money from your monthly budget.

Be honest

Be open about your current financial situation. If you have debts, then it’s a good idea to tell your other half about them. These things will come out eventually anyway.

Be prepared

You might want to prepare for if one of you suffers a loss of income. Should that happen, the other would need to take on 100% of the bills. Income protection insurance could save you from having to move house if the rent or mortgage is suddenly unaffordable. It covers your bills should you became ill or injured and unable to work.

Be practical

You might also want to prepare for if the relationship doesn’t work out. It’s not a romantic way to think, but it’s sensible to protect your assets if you split up. If you’re in your twenties this might not be such an issue. But as we get older we acquire assets and have savings. So it makes sense to plan what happens if you decide to go your separate ways – there is no such thing as a common-law husband or wife. An agreement should clearly outline what right that contributing person has on claiming on the property if only one owns the home.

If he or she pays for home improvements, for example, agree whether that entitles him or her to a claim on the house. A legal document known as a ‘cohabitation agreement’ can be drawn up by a solicitor to outline everything from property ownership to who owns the sofa.

This is particularly valid for unmarried couples where one stays home to raise the children. People wrongly assume that raising the children confers additional rights over property and assets, but that isn’t the case.  It pays, therefore, to set out what rights the stay-at-home partner has on property and assets beforehand.

Article is accurate at date of writing.