Single & Taxed

Single & Taxed

Being single has a lot going for it. Control of the remote, the ability to do what you want, when you want, sleeping in the middle of the bed, but there’s one disadvantage - money! It seems there’s a price to be paid for being single, and that comes in at £860 a month!! We take a closer look at the impact of the single tax.

 

 

Why is it so expensive to be single?

 

Approximately 8.34 million people live alone in the United Kingdom, and those people are worse off than couples simply because utilities, food, wifi, and even Netflix – all cost more if you live by yourself. 

 

Then there’s the cost of housing. With the average mortgage payment in the UK being £753 and the average rent coming in at £1061 (excluding London), being single means paying that hefty amount on your own unless you’re willing to share with other people.

 

Research from the Office of National Statistics (ONS) has also found that, aside from housing costs, people living alone spend a greater proportion of their income on food, drink, and furnishing their homes. 

 

Factoring all of that in, it’s no surprise that analysis also shows people living on their own spend an average of 92% of their disposable income, compared with two adult households who spend only 83% of theirs.

 

What is the single tax?

 

The “single tax” is a term that refers to the financial burdens incurred by single people, as opposed to those in a relationship or married. It relates to anything from the tax advantages for married people to losing out on shared expenses like groceries, car payments, holidays and more.

 

According to analysis from financial services provider Hargreaves Lansdown, a single person spends £1,851 on monthly household bills, compared to just £991 if you're one half of a couple. 

 

This is seen clearly by data from the Office of National Statistics, where, in London, the average cost of groceries per month for a single person comes in at  £150-200, with 35% of respondents saying that the cost was down to the increased price of being single. 

 

Discounts for couples

 

There are also specific tax breaks for married people. The marriage allowance allows one partner to reduce their tax bill by transferring £1,260 of their personal allowance to their spouse. There is also no inheritance tax on assets passed between spouses after death or capital gains tax on assets passed while you’re alive.

 

Even car insurance can be more expensive if you’re single, as figures suggest that couples and families make fewer expensive claims than people who aren’t married. This means insurance providers may offer you cheaper car insurance when you get married.

 

Holidays get the single treatment

 

Research by EasyJet Holidays has found an 83% surge in demand for solo trips, with 46% of Brits planning a trip alone this year. All of which is great for resetting your mind, but beware of the single supplement. 

 

This supplement is an additional fee that solo travellers have to pay when booking accommodation or travel packages that are typically designed for two people sharing a room. It’s a way for hotels, cruise lines, and tour operators to compensate for the fact that they are not receiving revenue from a second occupant.

 

Single supplements are commonly calculated as a percentage of the standard double occupancy rate. Depending on the provider and the type of accommodation, this percentage can range from 10% to 100% or more.

 

The good news about being single

 

The good news is what you miss out on in money; you may make up for in health. According to some studies, being single comes with a range of health benefits, such as lower levels of stress compared to those in relationships, greater autonomy, and less pressure.

 

A study published in the Journal of Marriage and Family found the most active and exercise-friendly people are those who have always been single. They also have fewer sick days and fewer doctor visits.

 

Additionally, according to research published in the journal Information, Communication & Society, single people often have stronger friendships compared to their coupled-up counterparts.

 

And while it may not always be cost-effective to be single, singletons do have financial autonomy. Research from Aviva reveals the same can’t be said for couples where money is a common source of tension. A quarter (26%) of respondents said they bickered about money at least once a week, with 5% admitting to arguing about money every day.  27% of couples also argue about bills, and 18% quarrel about having too much debt.

 

Finally, it’s worth knowing that on the financial front, almost two in five married people commit what’s known as ‘financial infidelity’. This includes financial deceptions like having secret credit cards or savings accounts, lying about debts, and hiding purchases from partners!

 

When asked why they have money in a secret account, almost a third (32%) said they wanted to keep some control of their finances; a quarter (25%) wanted to be able to treat themselves, and 15% said they needed to pay off a debt they have concealed from their partner.

 

So, while being single does have financial challenges, don’t let it overshadow the advantages that come with not being part of a couple, such as the autonomy and the flexibility to shape and be in control of your own finances, not to mention fewer dual financial obligations and responsibilities, giving you a greater savings potential.

 

 

 

 

The financial advantages and disadvantages of being single vary based on individual circumstances and financial goals. Financial well-being depends on various factors beyond relationship status.

 

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Written by Anita Naik Published Feb 12, 2024 ● 3 mins