The hidden cost of living alone: why the ‘singles tax’ costs a fortune

Feel like being single costs you more? Money Coach Talia Loderick explores the hidden expenses and challenges of solo living

The singles tax is the extra financial burden single people face because they don’t share household costs with a partner.

It’s not just household costs, either – the singles tax extends to discretionary lifestyle costs, too.

Are you, like me, a single person wanting to combat the winter blues by booking a beach break abroad?

You search your favourite holiday spots only to find no hotel availability for your party of one. Curious, you amend your search to two people and lo and behold, those same hotel rooms become available.

It’s not even like they’re charging the dreaded “single supplement” – an extra cost levied on those with the audacity to want to holiday solo – I literally couldn’t book for one person. They simply don’t want my custom.

We live in a world predicated on finding your other half. But wait, I’m a whole person!

The cost of being single

On average, a single adult spends £8,100 to cover the cost of housing, bills and groceries, according to research by brokers Hargreaves Lansdown, whereas the average per person spend for a couple is £7,800. As a fraction of their net income, however, the difference is much larger – 36 per cent for single adults compared to 29 per cent for couples.

This means that singles have less to spend on the “nice-to-haves”. Each member of an average couple spends £1,800 on restaurants and hotels – 30 per cent more than a single adult, for example.

Financial resilience

The bigger picture is that single people have less financial resilience than couples. Single households have just £40 left at the end of the month. Households headed by a couple have £385 left.

Some 47 per cent of single people have emergency savings to cover three months’ worth of essential spending compared with 73 per cent of couples. It’s due to the fact that singles have to spend more on the essentials than their coupled-up counterparts.

Single parents worse off

And single-parent households are particularly affected, says Sarah Coles, head of personal finance at Hargreaves Lansdown.

“Single parents suffer particularly harshly, partly because they either cannot work or have to add childcare to the burden of costs they face alone.

“Some 72 per cent have poor or very poor financial resilience, which is twice the average rate. Only around 26 per cent have enough emergency savings.

“Single parents are also more likely to be behind on bills or debt repayments. Almost a third are, compared to a national average of less than one in 10.”

Pensions

Your money also goes further in retirement as a couple compared with single people.

The Retirement Living Standards calculate that a single person will need to spend £14,000 a year to achieve the minimum living standard, £31,000 a year for a moderate one, and £43,000 a year for a comfortable life. For couples, it’s £22,000 for minimum, £43,000 for moderate, and £59,000 for comfortable.

But the number of single-person households is on the rise.

8.4m people live alone

In 2023, the number of people living alone in the UK was 8.4 million, compared to 7.8 million in 2013, according to figures from the Office for National Statistics.

Half of the 8.4 million people living alone in the UK in 2023 were aged 65 or over, compared with 47 per cent in 2013.

Most people living alone in 2023 were women, at 52 per cent. However, the number of men living alone in 2023 had grown by more than the number of women living alone since 2013.

By 2039, it is forecast that almost 11 million people will live in a single-person household.

The singles tax is leading to more couples separating but living under the same roof.

January peak month for break-ups

“People are definitely more worried about the financial implications of separating. We’re finding that more people are living separately but under the same roof. This is becoming more popular as the only way to manage financially,” says Kim Crewe, director of client wellbeing for Family Law Partners in Brighton.

“January and September are when we see a bump in enquiries from people wanting to separate.

“People use the Christmas break as reflection time. They don’t want to make changes in November and December with Christmas coming up, particularly if they’ve got children. But the beginning of January is a fresh start. September, following the summer holidays, is similar.

“When it comes to money, people have generally thought about things like council tax and other bills that are going to be more expensive, but they haven’t considered other areas where you pay more on your own, like holidays for example.”

Council tax

Ah, council tax. I asked people for their experience of the singles tax, and the 25 per cent single-person discount came up time and time again. I asked the Ministry of Housing, Communities and Local Government for an explanation, and here’s what they had to say:

“Council tax was designed from the outset to operate as a hybrid of a personal and property tax. A full council tax bill assumes there are at least two adults liable for council tax. Where there is only one liable adult, they will receive a 25 per cent discount – an effective 50 per cent discount on the personal element of the bill.”

It’s one thing to know the reasoning behind the discount, but it smacks of unfairness.

Housing costs

Of course, before household bills, you need a home. And living alone is costly. Research by the economic think tank the Women’s Budget Group found that the average home in England costs more than 11 times women’s median wages and eight times for men. The average cost of renting a two-bedroom property in England eats up 40 per cent of women’s earnings and 28 per cent of men’s.

Cinema, concerts, and train travel

Other areas where people report being stung by the singles tax include:

• “Cinema tickets – not being able to select any seat as you can’t leave a gap.”
• “Concert tickets. I wasn’t allowed to book a single ticket, so I can’t go and see an artist I really like.”
• “Couples thinking they’re one entity and assuming whether it’s dinner or accommodation that it’s a 50/50 split between you (solo) and them (couple), rather than per person.”
• “The ‘Two Together’ railcard. A third off train travel for you and the person you travel with most. They might as well call it the railcard for couples. Who else would you be travelling together with most often, recreationally and regularly?!”

Cut the cost of living alone

Couple up? I jest, but in my personal and professional experience, if you’re living alone, you’re probably super savvy when it comes to making your money stretch. Instead, I have a tip for couples: don’t assume your single friends have the disposable income you do and make social plans accordingly. Disposable income disparity in friendships is real.

Kim Crewe has this advice for couples wanting to separate: “One of the important things is reality testing. Do a spending plan and work out what single life will cost you. For those continuing to live under the same roof, I do a lot of work around revising their roles in the family. For example, starting to do their own washing or cooking so they feel there is a change that prepares them for when they are financially able to separate.”

Talia Loderick is a money coach. Talia helps people understand and take control of their behaviour with money so they can stop stressing and have enough to live well – now and in future. Visit: talialoderick.co.uk.