Being single can offer freedom and independence, but financially, it often comes with a significant penalty compared to those in relationships. This disparity, dubbed the “singles tax”, sees individuals facing substantially higher costs for essential living.
Rebecca Routledge, head of content at Money Wellness, highlights the stark reality: "The costs of a single person are not half those of a couple." Figures from Hargreaves Lansdown reveal that, on average, a single person spends an additional £1,759 annually on necessities. This sum represents "a significant proportion of their annual salary" for the average single person in the UK, who earns just £23,708 a year. These unavoidable expenses include rent, council tax, energy, water, broadband, and food – fixed costs that are difficult to reduce.
The financial strain leads to a marked lack of resilience among single individuals. Routledge states, "there’s a lot less financial resilience among single people," with nearly half (49 per cent) of those living alone experiencing "poor or very poor financial resilience," a stark contrast to just 12 per cent of couples. She warns, "That basically means, you get one unexpected bill and you’re knackered."
This vulnerability is particularly acute for young single adults; ISA provider OneFamily found 29 per cent lack emergency savings, compared to 16 per cent of those in relationships. Long-term prospects are also affected, with only 18 per cent of singles on track to buy a home (versus 43 per cent for couples) and 31 per cent saving adequately for a pension (compared to 44 per cent).
So, beyond succumbing to societal pressures, how can single individuals navigate this inherent financial disadvantage?
Firstly, it is crucial to recognise that the ‘singles tax’ is not a personal failing. Routledge asserts it is "totally out of your control. It’s nothing to do with being irresponsible," expressing concern that some feel compelled to remain in unhappy or even dangerous relationships due to financial implications. She explains that fixed costs are the primary driver: "If you live on your own, that doesn’t mean your mortgage is halved." Similarly, while energy and water consumption may decrease, standing charges mean bills are not proportionally reduced. Even council tax, with its 25 per cent single person discount, still leaves individuals paying 25 per cent more than half of a couple’s bill. The advice is to "be as savvy as possible" with what is within one’s control.
Secondly, maximise all eligible benefits. Routledge notes that "A lot of benefits go unclaimed every year and a lot of people who are working don’t realise they might be entitled to some support." Even full-time employment does not preclude eligibility for wage top-ups based on household income, a factor "particularly pertinent to single people." She advises those earning under £40,000 to explore their entitlements, suggesting debt advice charities or Money Wellness’s online calculator. For those struggling with bills, contacting suppliers is recommended, as "There are lots of support schemes that companies offer for people who have fallen behind with bills."
Thirdly, adopt smart shopping strategies. Single individuals often miss out on multi-buy offers, paying more for smaller portions. Routledge suggests signing up for loyalty cards and buying in bulk where possible. "Buy and cook like you are cooking for more than one person, but then freeze half of it," she advises. Meticulous planning is also key: "And really plan your shopping. Write a list, because single people tend to waste more food than people in couples. It’s just being really intentional with your spending."
Fourthly, maintain a rigorous budget. Understanding income and expenditure allows for the identification of unnecessary outgoings, such as "subscriptions you haven’t used in six months" or excessive spending on lunches. This clarity can also highlight when "you really are struggling and if you do need some professional help," prompting a search for debt advice. Exploring shared expenses, such as car-sharing, splitting streaming services, or dividing ‘buy-one-get-one-free’ offers with friends, can also alleviate financial pressure.
Finally, consider re-evaluating living arrangements. Taking on a lodger, if a spare room is available, can provide up to £7,500 annually tax-free under the Government’s Rent A Room Scheme, though Routledge acknowledges this is "a big decision." Alternatively, less traditional cohabitation models can offer relief. "You don’t always have to move in with a partner. You could share a house with a family member… or a single friend," she suggests. House-sharing with a parent or cousin, or even cohabiting for single parents to reduce childcare costs, are viable options "if they’re in a situation where money is really tight."
While the ‘singles tax’ presents a formidable financial challenge, proactive management and an awareness of available resources can help individuals build greater resilience and navigate the economic landscape more effectively.
