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Being single impacts retirement savings

Being single impacts retirement savings
Emma Lunn
Written By:
Emma Lunn
Posted:
12/02/2024
Updated:
12/02/2024

The financial cost of being single can make saving for retirement more difficult, particularly for those who live alone, according to a study by Phoenix Group.

The savings and retirement business found that 45% of UK adults in mid-life (aged 45 to 54) said retirement planning was easier in a long-term relationship, while 16% disagreed.

The study found that almost half (48%) of mid-lifers in a relationship are regularly saving for retirement, compared to 37% of single people.

Census data shows the proportion of one-person households in the UK has decreased over the past decade, except among people in their late 50s and 60s – the key pre-retirement life stage.

Phoenix Group’s longevity think tank Phoenix Insights carried out research to explore how relationship status can affect retirement preparations, and highlights the importance of reviewing finances and planning ahead when income is squeezed.

Researchers found that the financial cost of being single can make saving for retirement more difficult, particularly for those who live alone and pay living costs – such as rent, mortgage, utilities and food – from one income.

Figures from the Office for National Statistics (ONS) found people who live alone spend an average of 92% of their disposable income each month, compared with people in two-adult households, who spend only 83%. This leaves less money to put towards their long-term savings.

Retirement saving more difficult ‘if facing increased living costs’

Patrick Thomson, head of research and policy at Phoenix Insights, said: “Single people typically spend more on bills and other daily expenditures than those in a couple with two incomes, where costs can be shared. This squeeze on income not only affects short-term finances, but can have knock-on effects on the ability to save for retirement. The cost-of-living crisis has squeezed incomes further, so it’s more important than ever that people take stock of their current and future spending needs and put a plan in place for their long-term savings.

“As many as 18 million people in the UK are not adequately financially prepared for retirement, so regardless of relationship status, there is a pressing need for people to take steps to boost their long-term savings. Often simply thinking about finances is the greatest challenge of retirement planning, and kick-starting this journey will enable people to be better prepared for their future.

“While the UK has generally seen a fall in the number of people living alone over the last 10 years, the age group closest to retirement has bucked this trend. There could be many factors at play for this, including later life divorce and separation, and this could make retirement saving more difficult if facing increased living costs. Those who find it harder to keep saving as they approach retirement age can seek further guidance from their pension provider or free online service such as MoneyHelper.”

Analysis from Standard Life last year found that single retirees need to save £50,000 more than couples for a ‘minimum’ standard of living.