These are major financial issues facing single people: Sarah Coles​​​​​​​​​​​​​​​​​​​​​​​​​​​​

We’re increasingly likely to split up later in life. The average age of people getting divorced has never been higher – at 48 for men and 45 for women. Meanwhile, there are 2.2 million widowed women and 730,000 widowed men. When you add that together with the vast numbers of people who are single at the start of their adult life, it means 30% of households are made up of people living alone, or 8.4 million people.

We’ve just run a major piece of research: the HL Savings & Resilience Barometer, which looks at the financial health of the nation. It covers everything from how much money we have at the end of the month to whether we have enough savings, if we’re on track with our pension or whether we’re on top of our debts. It then breaks the results down to see how different groups of people are faring. It’s bad news for singletons.

Overall, we’re actually better off than before the pandemic. We’re managing on lower real disposable incomes, but because we’ve cut our spending so hard, we’re actually more resilient. However, single households have missed out on a massive chunk of the recovery. They have just £40 left at the end of the month, up £5 from their pre-pandemic level of £35, but £345 lower than households headed by a couple.

The study looks at whether they have enough emergency savings to cover three months’ worth of essential costs – which is the minimum that financial advisers recommend. The proportion of single people with enough savings has only increased ten points from 37% to 47% since before the pandemic, compared to couples who saw a rise of 21 points - from 52% to 73%. This is despite the fact they’re spending less than their coupled-up counterparts on the nice-to-haves – and comes down to the fact they’re forced to spend more on the essentials.

They’re shouldering all the household costs alone, which is always going to be more difficult, especially given how much more we’re spending on things like rent and energy bills than we were in 2019. They also pay the singles tax, which means that even though they get through half as much as a couple, they face much higher costs.

They’re spending more on essentials. On average, a single adult spends £8,100 to cover the cost of housing, bills and groceries, higher than the equivalent average per person spend for a couple (£7,800). As a fraction of their net income, the difference is even larger – 36% compared to 29%. It means they have to scrimp and save on the nice-to haves. For example, each member of a couple spends £1,800 on restaurants & hotels, 30% higher than a single adult. Similarly, couples spend £1,950 per person, on average, on recreation and culture, nearly 20% higher than a single adult.

To make matters worse, singletons earn less to begin with. The average single person living on their own earns £24,974 year after tax. A couple earns a combined average of £52,674 That’s not just more overall, it’s more each. It means these fixed costs are making a horrible dent in their finances every month, which leaves them far less financially resilient.

There are no easy solutions. If you’re not living alone out of choice, you could consider moving in with a friend or family member. Sharing the bills can make a massive difference to both of your finances. Of course, it’s an enormous lifestyle change, and not one everyone is prepared to live with. If that’s the case, you could consider sharing costs that are less of a commitment, like holidays, couple’s gym subscriptions, or cheaper multipacks at the supermarket.

If you continue living alone, there are a couple of ways of cutting your bills. You should make sure you get your council tax discount. Single people get a 25% discount, which doesn’t seem like enough given there are half as many people living there, but it’s a start. You can also instal a water meter. Usually if you have the same number of bedrooms as people (or more) you can save money, because otherwise water is priced by the size of the property. It also puts you in control of how much you use and pay for.

If you’re currently in a relationship, you might also want to consider what would happen if you were suddenly single. It’s a good idea to have an emergency fund of your own, so you can keep a roof over your head and pay for some advice if things don’t go to plan. If you end up staying together forever, it’s still a good idea to have money of your own you can rely on when you’re dealing with all the financial complications of bereavement.

Think about your pensions too. If you’ve relied on your partner to build up a pension, there are a couple of things to consider. If you get divorced, it’s worth spending the time and money getting a proper valuation of the pension, and ensuring you receive the value in the divorce. It’s horribly commonly overlooked, which can leave the person without any pension provision in dire straits in retirement.

If your partner was to pass away, you need to consider the death benefits you would be entitled to. They should check they have completed a ‘nomination of beneficiaries’ form, to make sure the benefits come to you. In the case of a defined benefit pension, this might be half the income, so you might think it’s enough to cover your usual expenses. However, don’t forget the fact you’ll be paying the bills alone and facing the singles tax, so unless you also have retirement income of your own, you will need to make sacrifices in your spending to make ends meet.

If you have a defined contribution pension, what you get will depend on how the person who saved the money started drawing it. You may receive the pension pot, or you may get a survivor’s pension from the annuity. However, if they bought a single life annuity, you may get nothing. You need to talk about these things plenty of time in advance, and make sensible plans together, so you don’t face a horrible income shock at a time when you’re least able to cope with it.

Even once you’ve got all this covered, you need to take care not to lose track of any aspect of your finances. Even if your spouse is a whizz with money and you’re not all that interested, keep abreast of the day-to-day and long-term planning, so you don’t need to start from scratch if you find yourself on your own.

Planning for a single life isn’t a particularly cheery prospect, and whatever you do, you’re still likely to have to re-think your lifestyle and your spending in order to make your income match your new circumstances. However, it’s worth bearing in mind that being single isn’t all bad. Being on your own means never having to compromise on anything from what TV you watch to where you go on holiday. You don’t have to listen to the same anecdote several times a day, or deal with someone else’s snoring. The single life may be expensive, but to some people it’s priceless.

Tax on pensions

Frozen tax thresholds are hitting pensioner incomes hard, with the number of people over state pension age paying tax surging by 26% since they were set in 2021/22 to 8.5 million. With the freeze set to last until 2028 there’s every chance that by the time we emerge, even people dependent on the full new state pension may pay tax on it.

Despite all the debate around tax during the election campaign, there was deathly silence on the frozen thresholds, so we’re highly likely to see the number of older taxpayers keep climbing in the coming years.

Sarah Coles is Head of Personal Finance at Hargreaves Lansdown and podcast host for Switch Your Money On.