Mitigating the 'singles tax'
We live in a world where, whether you're single or married, financial complexity is intense. There are endless moving parts, varying aspirations, and fluctuating financial headroom. This has contributed to the ‘one size fits all’ approach to financial advice being rightly consigned to history.
But there undoubtedly remain clear themes across demographic groups.
Something as relatively unassuming as marital status can be a key factor in a persons’ investing appetite, financial resilience, and the types of products likely to help them achieve their financial goals. Understanding these enables advisers to ask the right questions and ensure that likely challenges and opportunities are properly identified and addressed when it comes to longer term financial planning.
A question of status
The ‘singles tax’ is very real. Grocery costs, rent, even holidays are all more expensive per capita for those that tick the ‘single box’. We also find that those married or living together are more likely to hold savings, investments, and pension products than those who are single or have been previously married.
A look at the data around savings and investment values reveal the scale of the gap.
For those married/living together the average sits at £63,213, whereas the single figure is £36,083. Research also reveals that a larger % of singles are running into debt and drawing on their savings to make ends meet rather than being able to build up a solid financial buffer and grow their wealth1.
It has also been found that while around three quarters (73%) of those married/ with a partner have enough emergency savings to cover three months of essential spending, less than half (47%) of singles are in the same position2. And looking longer-term, over half (52%) of UK adults who are not in a long-term relationship say the financial pressure to meet retirement goals as a single person makes them anxious3.
More than mindset
Part of the challenge is a difference in mindset and priorities. For example, those either married or with long-term partners are more likely to be focused on protecting what they have built for their family/ loved ones and be clear-eyed on the need to continue to invest and grow assets to give longer-term security.
On the other hand, those that are single may be more carefree and readily enjoying the lack of additional responsibilities, taking advantage of the freedom that their marital status provides them.
But while these assumptions may be true of some, the reality is that financial challenges, seen and unforeseen, are not restricted to those with partners. And just because people might fall into the ‘single’ bracket, that doesn’t mean that they are without financial responsibilities or dependents - whether that’s vulnerable parents, siblings, children, or grandchildren.
Building resilience
Without the financial support of a partner, financial resilience is likely to be lower - leaving singles less well-equipped to navigate life’s ups and downs such as long term illness, redundancy, saving for a home, and even retirement. This, places a greater burden on this cohort to be more proactive in their financial decision-making.
It’s important for advisers to reiterate the importance of making sure that any money available for saving is properly put to work should be a priority - switching to savings accounts that deliver the best interest rates, investing money in stocks and shares, and taking advantage of tax breaks such as ISAs. But this is not a quick fix and will not transform resilience over night.
Protection, however, can. But it’s a tool far too often overlooked, and by that single cohort especially. While only 47% of those married or with a partner have life insurance, critical illness insurance, or income protection, this is the case for just over a quarter (26%) of single people. And this is heavily weighted by life insurance. In fact, only 8% of singles have critical illness insurance and 6% income protection4.
Whether it is critical illness cover or income protection, these types of products can offer much needed financial support for individuals and any dependents in case of illness, redundancy, or even should caring responsibilities get in the way of earning an income.
They also offer immediate peace of mind, enabling those without a partner to safeguard their lifestyle, while continuing to enjoy what they earned and while starting to build longer-term resilience.
Sources:
1IPSOS – Pension Report – October 2024
2MoneyWeek, Single people less financially resilient than couples – which other groups are struggling? July 2024,
https://moneyweek.com/personal-finance/how-to-cut-costs-and-maximise-savings
3MyPensionsExpert, https://mypensionexpert.com/articles-and-features/retirement-planning/co-piloting-or-flying-solo-how-relationship-status-can-shape-retirement-planning/
4Research carried out by Scottish Widows in conjunction with YouGov data - Jan 2025. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2110 adults. Fieldwork was undertaken between 15th - 20th January 2025. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).