Couples could opt for separate accounts on tax grounds

Couples looking at savings interest rates have been told to consider having separate accounts, rather than a joint one.

Justin Modray, from candidmoney.com, said that it can make sense from both a tax and spending point of view to have different savings accounts.

"If one partner is in a higher tax bracket than the other, then holding savings in the other's name will result in less tax being paid on interest earned. Or, of course, they could save into cash Isa's to enjoy tax-free interest," he added.

Mr Modray went on to say that there is also a greater temptation to "dip into" the account if it is joint, with some people thinking that any purchase is being subsidised by their partner.

His words come after research from first direct found that 58 per cent of couples are now looking at savings interest rates on separate accounts when they move in together, rather than on joint ones.
 

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2011-05-11 11:05:57 © Moneyextra.com