Why being single costs thousands more each year – and how it affects all of us
Valentine’s Day might be a gift-giving occasion your wallet could do without, but it’s thousands of pounds cheaper than being alone.
Being single costs £2,533 more a year, Sky News can reveal. Suddenly, that box of chocolates doesn’t seem so expensive.
Single people are forced to spend 22% more on rent or mortgages, council tax and energy, 28% more on food and 32% more on broadband and phones.
This is according to Hargreaves Lansdown analysis shared exclusively with Sky News, which found singletons have just £42 left at the end of the month – £341 less than couples.
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“They just don’t have that extra money, so they’re making these huge compromises in every bit of their life,” said Sarah Coles, head of personal finance at the leading investment firm.
“And people who are in couples are lulled into a false sense of security and don’t think they have to worry about it.”
But be it via divorce or bereavement, everyone becomes single again if they live long enough, she said.
A single tax?
“It didn’t even enter my brain,” said Robert Macdonald, 56, from Swansea, whose relationship ended eight months ago.
“Definitely living a single life is a lot more expensive and people who haven’t done it probably don’t understand that.”
The refuse collector said everyday essentials have become dearer now he’s unable to split the likes of broadband and phone bills.
Communication devices cost singles £828 a year on average, while each partner in a couple pays £628, the data showed.
“The renting market out there is ridiculous,” added Robert, who has become one of 8.4 million people in England and Wales living alone.
Robert said it was ‘scary’ how fast rent was rising
He spends 41% of his £1,700 monthly salary on a one-bed flat, 11 percentage points more than what is considered affordable.
The average rent for a one-bed was £726 in 2015 – now it’s £1,095, according to estate agent Hamptons.
And there’s no one to help shoulder the burden of heating it either.
“Frightening” is how Hazel, 71, from London, described the price of keeping warm since her husband passed away.
“The costs of gas in this country are shameful,” said Hazel, who chose not to publish her surname.
“For the most part, I dress in 25 layers and I don’t put my heating on.”
Essential housing costs – rent or a mortgage, council tax and fuel – set single people back £7,974 a year on average, whereas couples spend £6,215 each, according to Hargreaves Lansdown.
This £1,759 bill dwarfs the 25% council tax discount available to people living alone.
‘Extortionate’ food bills
Food offers no respite to singletons, who can’t necessarily take advantage of bulk-buy discounts or get through family packs before the produce expires.
Steph, 30, from London, who chose not to publish her surname, said her weekly shop cost her £20 in 2015 – now it’s an “extortionate” £50, despite cutting out meat and fish to save money.
“In the past couple of years, being single is just so much more difficult than it used to be,” she said.
“I feel like I’m a bit forgotten.”
Food costs single people £574 more a year than each person in a couple.
Steph pays £1,300 in rent for a property almost identical to one that cost her £500 in 2015
Holidays are no break
The single tax doesn’t stop at the border.
Since her husband Hugh died, Hazel has continued to take the cruises they once shared together to escape the loneliness at home.
But she is often forced to pay a single-occupancy fee, a supplement that doubles the cost of a room, charging her the same amount as if Hugh were there.
“It’s fiendish,” the former travel agent said.
“Literally what I pay is what people next door pay for two of them. It’s horrible – and that’s the same for every single hotel.”
Death, love and savings
With higher outgoings and one income, singles find it more difficult to save for a house deposit – which they have to fork out for alone.
Lenders also typically consider a mortgage between four and five times a household’s annual salary, putting many properties out of reach for single people.
This can mean they’re left paying rent into retirement when couples have paid off their mortgage.
“It’s a very difficult situation for single people,” said Hargreaves Lansdown’s Sarah.
“You’re going to have to build a massive pension or you’re going to have to buy.”
Just 20% of people with a mortgage live alone, according to Hamptons, and building a “massive pension” is just not an option for people like Lisa McQuoid, 44, from Colchester.
Raising her 15-year-old son on one income – £1,300 a month plus £1,000 Universal Credit – has left the single mum unable to save.
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“There’s no chance of me getting on the property ladder unless I find a boyfriend or my parents die,” said Lisa, who pays £950 a month in rent for the cheapest two-bed she could find.
“I can’t see life improving that much financially, you feel like you have to be in a couple.”
The average deposit in the UK is £24,543, Hamptons says, which would take a single person 11 years to raise if they put aside £185 a month.
Retirement
“Throughout retirement, the number of other people living on their own increases,” said Simon Sarkar, head of research at the Pensions and Lifetime Savings Association.
“It is something that is widespread, that people do face these changes in circumstances that we all should really think about.”
The association estimates it costs singles £31,300 a year to enjoy a moderate living standard in retirement, compared to £21,550 per person in a couple.
Yet less than a third (31%) of singles are on track with their pension savings, compared to almost half of couples (44%), according to Hargreaves Lansdown.
Often overlooked are the costs of physical and health needs in older age, Simon said.
Singles may have to buy in services that a partner would otherwise help provide, from gardening and DIY to personal care.
“Because it’s not in your face, you might think that you’re getting by, but the lack of long-term resilience is a big deal,” said Ms Coles.
Emergency funds
The financial resilience of single people is tested throughout their lives, with 46% of them having failed to save enough to cover three months of essential spending, compared to 16% of couples.
It makes it harder to absorb the financial hits dished out by life’s unwanted surprises.
When Lisa first answered the phone to Sky News, she had just parked a car that broke down the week before, costing her £250.
When Robert picked up, he asked if the gas man was on the other end of the line, who was scheduled to fix his boiler for £170.
“Again, there you go, if two people were here it would be cheaper,” he said.
Thames Water, which was due to run out of money, has been given a lifeline after a £3bn loan was approved by the High Court.
The loan gives the UK’s biggest water provider time to sort out its finances and could ward off nationalisation.
Court approval had been needed for the rescue plan centred on an emergency £3bn loan.
The business is provisionally attempting to borrow its way out of its financial problems as it struggled with £16bn in debt.
It had said it would run out of money by 24 March.
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It will now receive an initial tranche of £1.5bn to fund it until September 2025.
Mr Justice Leech who heard the case said, “The costs of finance and adviser fees in the present case are very high.”
“Indeed, they might be described as eye-watering.”
What does the loan mean?
The loan will cost at least £100m in fees and comes with a 9.75% interest rate.
The funding will be released on a monthly, or interim basis as needed, subject to Thames Water satisfying loan requirements including that it has taken on new shareholder investment.
Potential funders had submitted bids to invest in Thames Water and the company said it is now conducting a detailed assessment of each bid.
Loan terms dictate it must be repaid first in the event of administration and existing creditors have their repayment dates set back two years.
The timeline for accessing loan funds depends on the impact of a potential appeal process by B-class creditors. They had objected to the loan as they face being wiped out completely in a restructuring.
The company said it is considering when to draw down the money, loaned by so-called A-class creditors.
What next for Thames Water?
The government has been on standby to put Thames Water into special administration, a form of temporary nationalisation aimed at keeping the taps on in the event of financial collapse.
Some campaigners have called for nationalisation, though the government opposes this.
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Thames Water loan approved
Thames Water wants a full restructuring, taking in new shareholder investment and swapping debt for a portion of the company for existing creditors.
Its chief executive Chris Weston welcomed the ruling.
“This is good news for our customers, puts our business on a firmer financial footing and enables us to continue to invest in our network and deliver critical infrastructure upgrades for our customers and the environment,” he said.
The water utility is seeking more expensive bills to pay for its future investments and continued existence.
It’s asking for bills to rise 53% from this year to 2030, challenging Ofwat’s allowed 35% increase, equivalent to an extra £151 a year.
Mismanagement and a lack of adequate investment have brought Thames Water to its current state.
It’s crunch time for the UK’s biggest water provider Thames Water as its fate will be announced on Tuesday morning.
Thames Water finances hang in the balance with debts of £16bn and existing investors declaring the business “uninvestable”, due to the high fines it faces for environmental and other regulatory breaches and the clampdown on shareholder payouts.
But why is the utility provider in this position, what’s happening at court, and could it be nationalised if it doesn’t get the money it needs?
The short-term solution is for Thames Water to borrow its way out of the problem.
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In following this strategy the company has sought High Court approval for a £3bn rescue plan centred on an emergency loan.
That’s being provided by so-called A-class creditors who hold around £11bn in debt racked up by Thames Water Utility Holdings, the business that serves about 16 million customers in London and the South East.
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Thames Water boss in September said he can ‘save’ company
The decision on that request will be made on Tuesday morning.
Thames Water has previously said it will run out of cash by 24 March and the £3bn loan – delivered in two tranches of £1.5bn – would prevent the business from collapsing.
A controversial court battle
Two sets of creditors both want to lend Thames Water the £3bn sum, with the company favouring the A-class creditors.
But water campaigners have criticised the terms of the loan, which comes with an interest rate of 9.75% payable over two and a half years with up to a further £100m due in fees.
They’ve called on environment secretary Steve Reed to block the arrangement and force the company into special administration, effectively temporary re-nationalisation.
The terms of the loan dictate it must be repaid first if administration does happen and existing creditors would have repayment dates set back two years.
A second group of B-class creditors, who hold around £750,000 of subordinate debt, face being wiped out completely in a restructuring.
What if the loan isn’t approved?
High Court approval is contingent on 75% of its creditors agreeing to the rescue plan.
Failing that Thames Water would have to consider a plan that leaves creditors no worse off.
If the £3bn loan is not approved the chances of the company entering a special administration regime or nationalisation, are raised.
If nothing is done and no solution is reached then nationalisation could happen. The government is reportedly preparing for such an event by contacting private sector administrators.
What would happen if the deal is approved?
If the loan is approved Thames Water wants a full restructuring, taking in new shareholder investment and swapping debt for a portion of the company for existing creditors.
Thames Water last week said it was challenging the amount it can raise bills by.
It had sought a 53% hike to bills from 2025-30.
That demand was rejected and instead, a 35% rise was allowed as part of a price determination for all suppliers across England and Wales.
Is there an alternative to nationalisation?
Companies like the UK’s biggest energy supplier Octopus Energy have expressed interest in its technology arm, managing the utility businesses’s functions.
Infrastructure CK Infrastructure Holding and water provider Castle Water are also understood to have submitted proposals to invest in Thames Water.
Nationalisation is not the preferred method in government.
Mr Reed has said he wants a “market solution” and opposes nationalisation.
Underinvestment, mismanagement, and dividend payments have all been blamed for Thames Water’s precarious financial position.
Wages have risen while unemployment unexpectedly saw no change, official figures show.
Average weekly earnings rose 6% in the three months to December, data from the Office for National Statistics (ONS) showed, while wages – excluding bonuses – grew 5.9%, despite economists expecting a 5.8% rise.
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Even when inflation is factored in, wages are still rising. In the same month as earnings grew 6% the rate of price rises was 2.5%.
It marks the third month in a row of wage growth after falling for a year. In November both basic pay excluding bonuses, and average weekly earnings, rose at an annual rate of 5.6%.
Both private and public sector worker pay increased.
But the growth is expected to end and the rises are anticipated to slow to 3% by the end of the year, according to the chief economist at KPMG UK, Yael Selfin.
“We expect a steady downward trend over the coming months”, she said.
Increased costs for employers from higher minimum wage and upped national insurance costs are forecast to dampen wage growth.
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The minimum wage rise was announced in October
An unemployment surprise
The unemployment rate remained unchanged at 4.4%. A rise was anticipated by economists who were polled by the Reuters news agency.
The number of job vacancies also continued to fall in the latest three-month period, albeit more slowly, with the total number remaining a little above its pre-pandemic level.
The ONS, however, has advised caution in interpreting changes in the monthly unemployment rate due to questions over the reliability of the figures.
The exact number of unemployed people is not known – partly because people don’t answer the phone when the ONS calls.
What does it mean for interest rates?
Traders were pricing in a slim chance of an interest rate, of just 28%, before the data but the likelihood fell to 25% after the announcement.
Better wages can fuel inflation, which the interest rate setters at the Bank of England are fighting to bring down.
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