Just split up? Five ways to fix your finances now
1. Freeze your joint account
If your relationship is over, quickly cancel any joint account mandates that you have. This will stop either account holder being able to access the money in the account until you have both agreed how the money should be divided.
2. Cancel joint credit cards
Contact your card provider as soon as you can to get the credit card frozen. No matter who ran up any debt on the card you are both liable for it. You cannot cancel the account until any existing debt has been paid off and outstanding debt could affect your credit file. So try to deal with any debt quickly.
3. Disassociate your credit files
Once joint credit products have been dealt with, contact the main three credit reference agencies - Equifax, Experian and Call Credit - and ask for financial disassociation. This means that your ex's credit file will no longer be attached to yours. If you don't do this, your ex's credit rating could affect your ability to borrow money in the future.
4. Change your beneficiary
If you have a death-in-service benefit from your employer, a will, life insurance policy or your partner is named as a beneficiary on your pension, be sure to make the necessary amendments.
Fail to do so and your ex could be in line for a windfall if anything happens to you.
5. Sort out your home
Whether you rent or own your home, a break-up can cause problems. If you are both named on your mortgage or tenancy agreement, then you are both liable for your monthly payments. Sort out how you will make the payments as quickly as possible. Then either sell your home or make arrangements for one of you to be removed from the mortgage or tenancy agreement.
If you aren't named on your mortgage but have made substantial contributions to the household, speak to a solicitor as you may be able to claim a ‘beneficial interest' in the property, which could mean you get a payout if it is sold or you could be permitted to stay in the home.
An unexpected one-off financial gain in cash or shares, generally when mutual building societies convert to stock market-quoted banks. Also windfall tax, a one-off tax imposed by government. The UK government applied such a measure in the Budget of July 1997 on the profits of privatised utilities companies.
Generally thought of as being interchangeable with life assurance, but isn’t. Life insurance insures you for a specific period of time, at a premium fixed by your age, health and the amount the life is insured for. If you die while the policy is in force, the insurance company pays the claim. However, if you survive to the end of the term or cease paying the premiums, the policy is finished and has no remaining value whatsoever as it only has any value if you have a claim. For this reason, life insurance is much cheaper than life assurance (also called whole of life).
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.