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From higher household bills to missing out on tax breaks designed for couples, single people end up £2,000 a year worse off, according to new figures.
Higher costs mean that single people spending 92% of their disposable income on living costs, compared to couples, who spend 83%.
Almost one in three households in the UK is made up of someone living alone, and the number has been rising over the last 10 years. Half of all people living alone are over 65.
The good news? With a few smart switches and a bit of planning, you can cut those extra costs and strengthen your longterm financial security. Our guide will help you save money right now, and futureproof your finances.
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Many money-saving schemes designed for couples will still work if you pair up with a friend or family member instead.
Can you get a joint gym membership? Check with gyms near you. You don’t always have to live together to take advantage of a joint membership.
People living alone are entitled to a 25% discount on their council tax bill.
You can also get a discount if you care for someone living under the same roof who is not your partner, spouse or child under 18 (so this could apply if you care for an adult child who has a disability). People who are severely mentally impaired (for example with dementia, Parkinson’s or severe learning disabilities) can also get a council tax discount.
Citizens Advice has more information. There are different criteria for Northern Ireland, Scotland and Wales.
If you live alone, you could save with a water meter, especially if your home has more than one bedroom.
According to Liz Hunter, commercial director at MoneyExpert, you can contact your water provider to have them check if your property is suitable for a water meter, as not all are.
“Without a water meter, your bills will be estimated based on your property's size,” she tells us. “Therefore, you could be charged far more than you actually need to pay.”
But you might not save with a meter if you use a lot of water – for example if you regularly take long showers or water your garden a lot.
Rebecca Routledge, budgeting specialist at Money Wellness, a government-funded free advice service to help with money saving, suggests you ask your provider if it has social tariffs. “Water companies often have social tariffs or capped schemes for customers on modest incomes, but they don’t always shout about it – you usually have to ask about them.”
In Scotland, if you don’t have a water meter then your charges are based on the council tax band for your home. More than half of households in Scotland receive financial support with their charges through discounts or exemptions. If you claim council tax reduction you might also be able to get a water reduction under the Water Charges Reduction Scheme.
If you have a big enough spare room, Hunter tells us: “Websites like Airbnb and SpareRoom can help you connect with potential tenants for free, or you can pay to boost your ad.”
The Rent a Room Scheme allows you to earn up to £7,500 per year, tax-free, for renting out a spare room. Look at the rules first to ensure you’re working inside them.
Make sure you inform your insurer that you’re renting out a room, as this may affect your contents insurance. And, if relevant, you should notify your mortgage lender, as your loan terms may not permit a renter.
If you no longer drive or now have just one car on a large driveway, there is often money to be made by renting out an unused parking space. Bear in mind that you need an off-street parking spot on your property.
Hunter says: “The amount you can earn will depend on where you live – such as in a big city, near an event, a football stadium, an airport or a train station – but you could earn hundreds of pounds a month.”
Websites such as JustPark, ParkLet and YourParkingSpace can help you advertise your spot. Some are free, but others charge a fee, so it’s worth checking which is best for you.
While you’re trying to save on your day-to-day life expenses, don’t neglect the money you’ll need when you move into retirement.
Camilla Esmund, senior manager at Interactive Investor, warns: “The reality is that the system isn’t designed to level the playing field between singles and couples – and that’s unlikely to change any time soon. So rather than waiting for policy to catch up, single households need to focus on building up their own financial buffer.”
According to the Pensions and Lifetime Savings Association (PLSA), you’ll need £303,000-£490,000 in your pension pot for a moderate retirement and £540,000-£800,000 for a comfortable one – potentially more in London.
For a couple, things are much easier. A moderate retirement would need £165,000-£250,000 per person in retirement savings, on top of two state pensions, while a comfortable retirement would require a pension pot of £300,000-£460,000 each.
Antony Smith, an independent financial adviser at Providus Financial, says that there are steps you can take to boost your pension pot: “Having a clear plan in place is key,” he tells us. “It’s never too late and it’s amazing what can be achieved in a few years.”
These are some of the ways you can boost your pension if you’re worried about having enough money to retire on.
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