Financial abuse - how to protect yourself
Money can be a dangerous subject within relationships. Many a row starts when saving and spending habits collide.
In decades gone by money matters were more straightforward with one breadwinner earning the household income and managing the finances in many cases. But now with people settling down later when they already have assets and often two incomes coming in, money can be a lot more contentious.
For most of us this just leads to minor disagreements but for others money can become a weapon in a relationship with one partner using it to control and bully the other. Read on to find out what can go wrong financially in a relationship and how to protect yourself.
A growing problem
Financial abuse is a quiet but growing problem, so much so that a new bill is currently working its way through parliament that will make it illegal. If passed, the bill, which has been presented by Welsh MP Elfyn Llwyd, would mean people found guilty of domestic abuse could be jailed for up to 14 years, and the definition of abuse is being broadened to include both financial and emotional abuse.
"At present, our criminal system is too focused on the physical evidence of violent crimes committed against a victim," says Llwyd. "Coercive control and emotional blackmail, on the other hand, do not leave scars or bruises – but they are every bit as debilitating."
It is difficult to say how prevalent financial abuse is, as it often isn't reported but the Citizen's Advice Bureau says it sees numerous cases of people being financially bullied by their partners. It assists 13,000 people who have suffered from domestic abuse every year and many of those cases have an element of financial abuse.
"One woman sought help from the Citizens Advice Bureau after she had been forced to sign a loan agreement and transfer her estranged husband's debts to her credit card," says Gillian Guy, chief executive of the Citizens Advice Bureau.
"Financial abuse is often overlooked but it is enormously difficult for the women who experience it," says Polly Neate, chief executive of Women's Aid - although it's not just women who are victims. "Domestic violence is about control and coercion, and many perpetrators will use money as a way to control their partners during and even after a relationship."
Many of us have experienced some form of money trouble within a relationship. This can range from a partner who borrows money from you and doesn't pay it back to dating someone who never pays their way. Or it can be far more extreme.
For Anne*, it all started with a family crisis. Her husband Peter lost his job and was unemployed for six months. It was a tough time for the family finances with Anne even resorting to selling Christmas presents to pay the bills. Eventually, Peter got a new job but despite earning more than £65,000 he began to resent contributing to the household.
"One day he announced that he wanted to see all the statements for our joint bank account," says Anne. "We then spent a humiliating afternoon where I had to account for every penny I spent."
After that, Pete stopped paying any money into the joint account and would give Anne only a small sum "to cover what he felt the household expenses should be." He used to refer to Anne and their two small children as "spongers".
Things came to a head when Anne inherited a small amount of money. Pete felt the money should be used to clear debts he had built up but Anne used the money to hire a van and escape during the night with the children.
"I hired the van with my own money, which felt like such freedom," says Anne. "Handing over my new debit card that was all mine and accessing money that was mine to control was amazing."
Financial abuse can also extend beyond a relationship. Women's Aid has heard of cases where ex-partners have bought up website domain names to try to hinder their ex's earning power by preventing them setting up a business. All these things will hopefully become criminal offences if the draft bill is passed by parliament.
How can you look after yourself?
There are a number of ways you can protect yourself and your finances in a relationship.
- In the early stages, start good money habits. Take it in turns to pay for things and don't let spending become one-sided. It may seem romantic but can lead to resentment later.
- Think long and hard before merging all your finances. While a joint account for household expenses makes life easier, it can lead to you losing control of your money. Keep your own account that your wages are paid into, and then move a set amount into a joint account each month.
- Before taking out any joint credit products – whether it is simply a credit card or a mortgage be aware of the repercussions. You and your partner's credit files will become associated. That means that if one of you has a poor credit rating, it could affect the other's ability to borrow money in the future. You could also find yourself liable for your partner's debts if they run them up on a joint credit card.
- Have a conversation about cash. Talking money can be awkward but it pays to make sure neither of you have any hidden debts or vastly different attitudes to saving. The early stages of relationships are all about getting to know each other, and that's not just whether you want six children or not but also how you intend to pay for the future.
- Don't pass the buck. Handing your finances over to someone else can be tempting but don't let your partner handle all money matters. Not only does this leave you vulnerable to being robbed, it will also lead to a major headache if your partner dies. Make sure you know where your family finances are invested and how to access those accounts.
Where to get help
- If you think you've been the victim of financial abuse or need advice on money in your relationship, the Citizen's Advice Bureau can help. Call 08444 111 444 or find your local centre at adviceguide.org.uk.
- Women's Aid specialises in dealing with abuse within relationships. Visit womensaid.org.uk and see its section dedicated to money matters. If you would prefer to speak to someone, you can call them on 0808 2000 247.
* Names have been changed
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.