Seven tips on how to be a financially savvy singleton

20 December 2019

Whether you are ‘self-partnered’ through choice or due to a break-up or bereavement, you may feel under pressure because of higher living costs. We look at ways to go it alone – and not lose out financially

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If you live alone, you are part of one of the fastest-growing demographics in the world. There are nearly eight million one-person households in the UK, while the number of people living alone has increased by a fifth over the past 20 years, according to the Office for National Statistics.

Investment company Hargreaves Lansdown recently studied the financial impact of living alone and concluded it was “eye-wateringly expensive”. It found only half of people living alone have money left at the end of the month, while two-thirds of child-free couples do.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says: “The sheer cost of living alone means basics such as the bills and rent or mortgage swallow a huge chunk of your income – leaving you little or nothing by the end of the month.”

However, being single does not have to mean being skint – there are ways to cut costs whether you are buying a property or saving for your retirement.

Buy a property

Saving a deposit is one of the biggest barriers single people face when trying to get on the property ladder. Couples have the edge over singletons because sharing rent and everyday household costs, plus the fact they have two incomes, means they can typically save the same amount in less than half the time it would take a single buyer.

If you are aged 18 to 39, opening a Lifetime Isa can help you save faster – either towards your first home or retirement. You can contribute up to £4,000 each year, until you are 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 a year.

Shared ownership is another option. With this scheme, you buy between 25% and 75% of a property and pay a subsidised rent on the remaining share, which is owned by a housing association or charity. You will need a deposit of between 5% and 10% of the share you are buying – not the entire purchase price.

If you are already on the property ladder and have a spare room, you can earn up to £7,500 a year in rent tax-free under the government’s Rent a Room scheme. Alternatively, sites such as Airbnb and Homestay enable you to let your spare room on a nightly basis or your whole home while you are on holiday. You can also rent out a room Monday to Friday on sites such as Fivenights.com or SpareRoom.com, so you can enjoy the privacy of your own home at weekends.

Cut household bills

Household bills are one of the biggest expenses of living alone. However, single occupants are eligible for a 25% discount on their council tax bill – so make sure you claim it.

You may be able to save money by arranging for a water meter to be installed, especially if you are economical with your water use. If a meter cannot be installed, you can ask to be put on your water company’s ‘assessed household charge’ single occupier tariff.  This will be cheaper than a bill based on the number of bedrooms in your home.

Everyone, single or not, should regularly check they are on the cheapest energy tariff. One advantage of living alone is that you can take full control of the energy you use. A smart thermostat, such as Hive or Nest, can help you do this wherever you are. For example, you can turn your heating off when you go out and switch it on again, via your phone, when you are on your way back home.

The financial upside of being single

While being single or living alone might seem more expensive than life as half a couple, it has its advantages. Your money and how you spend it is totally within your control and you don’t have to clear spending decisions with a partner.

Claire Walsh, personal finance director at Schroders, says: “Money worries are regularly cited as one of the main reasons for relationship breakdown and divorce. While being single can cost more, one of the main benefits is that you are completely in control when it comes to your finances and you can take decisions which are in your best interest.

“Whether it’s clearing debts, deciding where to invest or how much to put into your pension, you don’t have to check in with anyone and there is no danger of a partner’s poor financial behaviour jeopardising your plans.”

Find cheap holidays

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Got incurable wanderlust? Being single is the perfect opportunity to see the world without having to plan your itinerary around someone else.

Jack Sheldon, founder of flight-deal website Jack’s Flight Club, says being flexible on destinations and dates can save you a lot of money.

“The biggest advice is to be ready to pull the trigger on a deal when it comes, as they don’t often last very long. Single travellers often have an advantage here as they can make up their mind without having to consult others,” he explains.

Package holidays and mainstream hotels tend to be geared up for couples and families, so single travellers need to think outside the box to cut accommodation costs. Hostels often have affordable single rooms, as well as bargain beds in shared dorms. Other options include lodges and single rooms in short-stay rentals, such as Airbnb.

If you prefer company, small group tours are perfect for solo travellers and usually combine transport, accommodation and some activities. Companies such as G Adventures, Intrepid Travel and Much Better Adventures pair up single travellers of the same gender to share a room.

Use car-hire sites

If you own a car but don’t use it often, you can rent it out by the hour or day on car-sharing platforms, such as Drivy. How much rent you will receive will depend on its make, model and age, but the average is about £30 a day.

For example, Drivy takes 21% of each booking as a service fee, plus a £3 flat fee. Every booking is covered by Allianz insurance, so if your vehicle is damaged during a rental period, repair costs will be covered. 

Another option is to register your upcoming journeys with a car-sharing service such as BlaBlaCar and split the costs with passengers. 

Joining a car club may be more cost effective than buying one, especially if you do not drive very often. Bluecity, for example, runs an all-electric fleet. An annual subscription costs £5 a month, plus 19p a minute to rent a car, with a minimum journey time of 20 minutes. This works out at £5.70 for 30 minutes.

Check your credit record

If you have previously lived with a partner and had a joint account or both your names on household bills, it is possible you still have a “financial association’ with them on your credit record. This can have implications when you next come to apply for a mortgage, credit card or other credit agreement.

Lisa Hardstaff, credit information expert at Equifax, says: “If a couple has applied to take out a joint financial agreement, their credit information will be linked on each other’s credit files.

“Once a couple splits, a lender may look at both individuals’ credit history for future applications, even if they are no longer a couple and the account has been settled and closed.

“Anyone going through a relationship break-up should make sure all accounts are settled and closed down. In addition, they should place a ‘notice of disassociation’ on their credit report. This lets lenders know that an individual is no longer financially associated with someone.”

Batch-cook to save

A decent-sized freezer can be a great help if you live by yourself. Supermarkets typically target families and couples with multi-buy offers. Being able to freeze food means you can take advantage of these deals.

Batch-cook and freeze sauces, and casseroles, including chilli con carne, bolognaise, curry, soup, and lasagne. Visit Cookingonabootstrap.com or US site Budgetbytes.com for more tips.  

“I shared a room in an Airbnb for £5 a night”

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After the Brexit vote in 2016, Lucien Jack (pictured, right, during his EU tour), a 30-year-old comedian from Northamptonshire, decided to visit every EU country he had not previously been to and perform Brexit-themed stand-up comedy there.

Lucien says: “I used Skyscanner, Kayak and Holiday Pirates to find cheap flights and used budget airlines such as Wizz Air, Ryanair and easyJet. Some of the cheapest flights I took include a £15 return to Portugal and a £10 flight to Bulgaria.”

Despite destinations such as Bulgaria being good value for travellers, Lucien avoided hotels and stayed in either an Airbnb or youth hostel.

He says: “A bed in a dorm in a youth hostel can be just €8 to €10 (£6.83 to £8.53) a night. However, I shared a room with a student in an Airbnb in Plovdiv in Bulgaria for just £5 a night including a mini-bar and snacks. It was on the outskirts of town, so I walked to my comedy performance.”

In 2017, Lucien spent eight days travelling from Split in Croatia to Timisoara in Romania, via Sarajevo in Bosnia and Belgrade in Serbia, using either public buses or shared minivans.

“It’s easy to meet other travellers if you stay in hostels and the more people you get together to share a mini-van, the cheaper it gets. It’s also great for swapping travel stories,” he says.

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