This podcast isn’t personal advice. If you’re not sure what’s right for you, seek advice. Tax rules can change and benefits depend on personal circumstances.
This podcast isn’t personal advice. If you’re not sure what’s right for you, seek advice. Investments rise and fall in value, so investors could make a loss. Tax rules can change and any benefits depend on your personal circumstances.
Full podcast episode transcript
[0:08] Susannah Streeter: Hello and welcome to Switch Your Money On with me, Susannah Streeter – Head of Money and Markets here at Hargreaves Lansdown.
[0:14] Sarah Coles: And me, Sarah Coles – Head of Personal Finance – and it’s good to be back in the studio and away from trying to record in our noisy homes with the cacophony of family life in the background!
[0:24] Susannah Streeter: Yes – but, although we like to complain about the trials and tribulations that come with having a family, this episode we want to look at the other side of the coin and the challenges for people who live on their own – whether they’ve been single for some time, or whether it’s the result of divorce or bereavement.
[0:39] Sarah Coles: Yes – being single can have a massive impact on your finances – and means there are some areas people really need to focus on – so that’s what we’re covering in this episode, which we’re calling, ‘The Single Files.’
[0:49] Susannah Streeter: We’ll be speaking to Ylva Baeckström – a Senior Lecturer in Finance at King’s College Business School. She specialises in Behavioural Finance and can take us through some of the issues driving single people.
So, Ylva, we’ll be exploring some of the cost of being single, but does being on your own also affect how people approach finances in general?
[1:11] Ylva Baeckström: I think it does. You think about money differently when in a relationship and when you’re single. We all have our own style with money – we have a relationship style with money – and, when in a relationship, you have two people’s different ways of acting around money – but we’ll go more into that later.
[1:30] Sarah Coles: Yes – it’ll be great to discuss this more later in the podcast. We’ll also be speaking to Helen Morrissey – our Head of Retirement Analysis – about some of the questions people need to ask when they’re planning a solo retirement.
[1:41] Susannah Streeter: But, before all of that, we should go through what’s moving markets at the moment – and, unsurprisingly, President Trump is still making his presence felt.
As the world holds its breath in anticipation of where the latest round of US tariffs will land, there’s been a mixed reaction on financial markets. The UK market took a
breather from its record run upwards.
The UK Government has had hopes it may escape the worst of the tariffs, given the majority of trade with the US is in services rather than goods. But, with Trump’s claims that VAT is a tariff – and the digital services tax on tech giants also in scope – trade envoys and Ambassador, Peter Mandelson, will have their work cut out to claim that the UK should be viewed as a special case.
Like other nations, the UK remains highly vulnerable to the whims of capricious US policy.
[2:37] Sarah Coles: But it’s not all doom and gloom, is it?
[2:39] Susannah Streeter: No – there has been a bit more optimism around the UK, given that it ended the year on a more positive footing than expected.
Output rebounded by 0.4% in December – certainly providing some relief for Chancellor, Rachel Reeves. But the risks of stagflation are still hanging around – with inflation expected to head up to 3.7% this year and the economy stagnating.
If you look at the last quarter of the year, the economy still only eked out growth of 0.l1% over the three months – which is not exactly shooting the lights out. But, with concerns that the economy went into reverse, it’s still a dose of better news.
[3:22] Sarah Coles: So, how is the pound weathering all of this?
[3:24] Susannah Streeter: The pound has recently regained a bit more form against the dollar, helped by this better-than-expected economic snapshot – with traders also sanguine, for now, about the knock-on effects of US trade policy.
This puts a bit more pressure on the overseas earnings of the multinationals listed on the FTSE – although sterling is still trading significantly lower than its level back in September.
[3:47] Sarah Coles: And we should also check in on tech stocks, which have been in the news a fair amount recently.
[3:52] Susannah Streeter: Yes – Chinese-focused tech stocks have been buoyed by tentative hopes US tariffs may end up with a bit less bite amid hopes of great support, domestically.
The postponement of the enforcement of a ban on TikTok in the US until 5th April has also lifted sentiment. The wildly popular social media platform is back on Apple and Google App stores in the US, which will be greeted by a big sigh of relief from businesses and influencers who rely on it.
The market in Hong Kong rose amid the news, with optimism high over upcoming talks with the technology sector. Huge volatility hit Chinese tech firms in 2021 amid a clampdown on the sector, but there are signs authorities are keen to sow more seeds for growth.
Chinese President, Xi Jinping, is expected to meet with senior executives – including Alibaba founder, Jack Ma, and Tencent Chairman, Pony Ma.
This is sending fresh enthusiasm through the sector, which is already infused with AI optimism surrounding the progress made by DeepSeek and its low-cost large language model.
[4:58] Sarah Coles: And what’s all this been doing to US companies?
[5:01] Susannah Streeter: Wall Street has been calm in the face of some chaotic policymaking from the White House – despite the risk of Trump’s threats for consumer prices coming on top of the latest steamy inflation snapshot.
The S&P 500 rose to near-record levels. Although Trump’s way of doing business is to infuse unpredictability into trade partnerships to gain the appearance of domestic political wins, the prospect of tax cuts ahead is mitigating concerns and a raft of buoyant corporate news has also added to positive sentiments.
The release of producer price inflation data showing a more measured rise in inflation – if you strip out volatile energy and food prices – has helped ease some worries. There is also expectation that fresh rounds of tariff announcements will be quickly followed by hasty phone calls and fast rounds of negotiation.
[5:58] Sarah Coles: It feels like there’ll be plenty to keep us occupied for some time to come on this. Of course, meanwhile, real life continues – and, for some people, it’s more of a challenge than others.
It’s gonna come as no surprise to anyone living on their own that being single is an expensive business – but the HL Savings & Resilience Barometer released in January this year has revealed just how much harder it is to make ends meet when you’re on your own.
Despite making less per person than their coupled-up counterparts, single people end up spending far more on the essentials – so they have to give up on an awful lot of the fun things in life to make ends meet.
A big part of the problem comes down to the fact that there’s nobody to split the bills with – so singletons have to cover their costs alone. The HL Savings & Resilience Barometer found that the essential costs of putting a roof over their heads costs single people £1,759 more than each member of a couple.
[6:51] Susannah Streeter: What about the monthly bills?
[6:55] Sarah Coles: There is bad news here too because communication, including broadband and landlines – as well as mobiles – hits single people harder. In many cases, they need the same products as a couple – but, of course, the single person shoulders that cost alone. They spend an average of £200 more each.
Food costs single people £574 more a year – that’s thanks to not being able to buy in bulk or get through family packs before the food expires. A single person spends £2,606 and a couple spends £2,032 – so that’s a massive difference.
As a result, they’re forced to cut back on a lot of the nicer things in life. They spend less per person on everything from clothes to recreation and culture and eating out, and even hotel stays in the UK.
[8:07] Susannah Streeter: But, even after all of that cost-cutting, single people are still worse off, aren’t they?
[8:13] Sarah Coles: Yes – a single person living on their own has an average of £42 at the end of the month – that’s after their normal expenses. That’s much less than half of the amount a couple has – at £383. They’re more than four times as likely to suffer from poor financial resilience.
Single people are also more likely to be worried about their debt position: 17% have concerns compared to 7% of couples.
With money so tight, it means they’ve got less to put aside in savings. Financial advisers often recommend you have cash to cover 3-6 months’ worth of essential spending in an easy access account – and around half (46%) of single people fall short – compared to just 16% of couples.
They find it much more difficult to save for a property – not least because they’re having to cover the cost of the deposit on their own. It’s one reason why single people are less than half as likely to be on track to meet their goals when it comes to home ownership (18% compared to 43%) – and it takes a toll over the long term too, with less than a third (31%) on track with their pension savings, compared to almost half of couples (44%).
[9:17] Susannah Streeter: So, some people will be listening to this and thanking their lucky starts that they’re in couple, so they don’t have to worry about this – but that’s not necessarily the case, is it?
[9:26] Sarah Coles: Sadly not.
Unfortunately, recent figures have shown that 41% of marriages end in divorce by the 25th year after they got married – and even if this isn’t something you have plans for at the moment, it might not be something you have any personal control over.
It means, even if you’re in a couple, you need to consider how you’d cope in the event of a divorce – so how you would afford to live as well as things like affording a home of your own and building a pension. It doesn’t mean living in fear, but it can help concentrate your mind on things like whether you’re saving enough for the future.
[9:56] Susannah Streeter: And it’s not just divorce, is it?
[10:02] Sarah Coles: No – even if you stay together for life, then one of you will die first – which means not only will one of you be single later in life, but you’ll be dealing with an unfamiliar and difficult situation at the worst possible time – plus dealing with the fact that life has suddenly got much more expensive.
You may plan to leave everything to one another, so you think you’ll be fine – but there are issues. If, for example, you got half of your partner’s final salary pension, you’d need to account for the fact that your living costs would be unlikely to half – thanks to the so-called singles tax. Plus, you need to be comfortable that, if you’re left behind, you’d be right across your finances and able to manage them on your own.
[10:38] Susannah Streeter: There are so many issues relating to pensions around this topic that it’s worth us bringing in Helen Morrissey here. There’s a lot to discuss, consider, and plan for, isn’t there?
[10:51] Helen Morrissey: Absolutely – you are right. Whether you’re unmarried, separated, divorced, or bereaved, it all has a big impact on your pension.
If I were to give my top tip to anyone, it would be to make sure you build up your own individual pension provision. This is true whether you’re single or in a relationship. Relying on someone else may be tempting – especially if they have good provision – but, if the worst were to happen, then you could be left struggling in retirement.
Keeping your own pension saving – whether you’re single or attached – means you have your own pot of money that you have control over and you can budget as you need. You don’t want to feel like you’ve got to ask your partner for money when you need it.
That’s not to say that you manage your finances completely separately. Couples who plan together can work towards a common goal – but, if you rely on someone too much, you risk not just being left short in the event of a relationship breakdown or death, you also risk lacking the confidence to mange your own finances in retirement.
[11:51] Sarah Coles: You’ve made some good points there, Helen. I’ve always advocated strongly for both partners to build up their own retirement savings. It’s also very
tax-efficient because they can make full use of both of their tax allowances.
[12:01] Helen Morrissey: That’s a good point there, Sarah – a great way of really boosting your retirement resilience.
[12:07] Sarah Coles: However, many marriages do end in divorce – so what are people’s options?
[12:12] Helen Morrissey: It’s important to say that pensions can be part of any divorce settlements – just as the family home can be. Obviously, if you’ve both got your own savings, then you may not need to split pensions – but, if you do, there are a few options.
If you can’t agree, a court might decide how your pensions should be split. This may include issuing a pension sharing order, where all or part of a pension is transferred to an ex-partner.
There’s also a pension attachment – or earmarking order – where the pension stays in the same name, but the ex-partner gets a share when it pays out. This might work well if you and your partner are on good terms – but, if you are looking for a clean break, this probably isn’t the best option.
Finally, you might also be able to keep each pension in full, but divide your other money and property differently. For example, if you keep a large pension pot, your ex-partner might keep your house if it’s a similar value – this is called pension offsetting.
[13:11] Susannah Streeter: It all sounds fairly complicated, Helen. You’ve covered what happens when people split, but what happens when they die?
[13:21] Helen Morrissey: That’s a good question, Susannah. So, when you get a pension, you will be asked to fill out an Expression of Wish form. This states who you would like to receive your pension, and the scheme managers and administrators will use it when they need to pay out death benefits.
It’s absolutely vital that you update these forms for all of your pensions whenever your relationship status changes. This can ensure that an ex-partner doesn’t get the pension that’s meant for a current one. This can cause huge financial difficulties at an already difficult time.
[13:56] Sarah Coles: I wanted to ask you about cohabiting couples. I imagine it’s doubly important for them to make sure they’ve kept these forms up to date.
[14:02] Helen Morrissey: Absolutely. People believe that, once they’ve lived together for a while, they get some kind of common-law status where they get the same rights as a married couple. However, this isn’t the case, and you can live with someone for 20 years – and bring up a family with them – and still find yourself with nothing if these forms aren’t filled out. Keeping these Expression of Wish forms up to date means the right people get the right money at the right time.
[14:26] Susannah Streeter: Thanks, Helen – as always, it’s fascinating to delve into the pensions issue. Of course, we’ve focused mainly on the practical side so far, so it’s worth us taking the time to consider some of the other issues around financial behaviour – so let’s bring back Ylva Baeckström to look more closely at this.
Ylva – we’ve talked about how being single is expensive – is it more the case for women or men, or is everyone in the same boat?
[14:56] Ylva Baeckström: To a certain extent, we’re all in the same boat.
Before we go into the difference between men and women, we need to think about financial anxiety. We’ve talked a lot about the facts and the figures in the podcast so far, but we haven’t spoken about the fact that the vast majority of people in the UK struggle with financial anxiety. That happens to people regardless of whether they’re rich or poor – but, of course, it’s more acute if you don’t have enough money.
65% of people in the UK don’t think they can survive on their savings for even three months – that is scary. Whether you’re a man or a woman, you’re likely to have similar struggles. However, we’ve got to remember that a woman earns a lot less than a man. She’s more likely to have career breaks – and, therefore, even fall behind in terms of promotions in the future – and she also lives longer. The fact is that – even though she earns less throughout her life – a woman needs more money to survive than a man.
[15:55] Sarah Coles: What can single people do to make their finances less stressful?
[16:05] Ylva Baeckström: Absolutely. Firstly, you need to get to know your own relationship with money: ‘What is your financial attachment style?’ It’s quite similar to the concept about a relationship attachment style. We can be avoidant – we can be insecure – we can feel secure about having relationships with other people – and the same goes with money.
If you’re anxious about your relationship with money, then you might worry about it – you might not want to engage with money – you think, ‘What’s the point of me doing anything? – I’m not gonna be able to help myself anyway.’ If you’re avoidant, then you might not even open your bank statements – you might not even bother looking ‘cause you think there’s no point – and so Armageddon kind of feeling.
And people who are secure with money – they don’t mind dealing with money at all – and, of course, they are then ahead of the curve. And, when you’re in a relationship, then you’re adding the other person’s attachment style too.
[17:05] Susannah Streeter: How do couples tend to manage money when they’re together – and what strategies could they use to try and alleviate the other’s attachment relationship?
[17:23] Ylva Baeckström: In answer to your first question, quite often badly.
There is something that a couples therapist likes to think about – it’s called a ‘Couple Fit.’ What is the fit between the couple? How are they attracted to each other? Is that a healthy fit between them? What do they get out of each other?
The same thing with money: what is the financial fit in the relationship? That is hardly ever spoken about – we avoid talking about money in relationships – but the fact is that, when we get together with somebody, we’re unlikely to be on the exact same financial wavelength as our partner.
We might earn less – we might meet somebody when we’re both students – and they’ve already bought a house. They might then later take a career break when we earn more. There might be an illness – where somebody loses their earnings. All sorts of things happen in relationships – and, if we don’t talk about it, we’re probably gonna have a lot of arguments about it and there’s gonna be conflict.
[18:19] Sarah Coles: How d’you think it affects people when they part ways? How do they tend to feel about money at that stage?
[18:33] Ylva Baeckström: So, in a relationship, it’s important to be open and honest about money, but also look after your own integrity. In a sense, a relationship is not a retirement saving. You can’t rely on having your partner forever – you’ve got to make sure you look after yourself in terms of your money. And your partner should respect your wishes to do that – and they should collaborate with you on that – otherwise, it’s probably not the right partner in the first place.
When you become single – even if it’s planned or unplanned – it’s important to have that savings built up and have your own personal finances sorted, so that you never forget that, in a relationship, you’re three people, essentially. It’s you, it’s your partner, and it’s a combination of you two as a relationship – but you need to make sure that you also have your own financial plan.
[19:25] Susannah Streeter: D’you think this affects women and men differently – the way that they view money?
[19:37] Ylva Baeckström: If we go down the generalisation route, then my research – and lots of other research – shows that women, on average, are less risk-tolerant. They feel that they know less about money and they are less financially confident. If you are less financially confident, your financial self-efficacy – your belief in your own abilities about money – is lower. When you feel like that – when you feel like you don’t really know about something – or you don’t belong somewhere – then you may tend to avoid doing it.
So, that becomes an issue. If a couple splits up – where the woman might have been the avoidant one – then she’s faced with having to deal with it for the first time – or for the very first time in a long time – but that doesn’t have to be like that. I want to stress that this is average – my research finds that women are successful – women who make it to senior management positions, or entrepreneurs, or who are wealthy... they have different types of risk-tolerance levels – and I’d certainly put myself in that category. I have a high risk-tolerance level – and I’m financially confident and knowledgeable – and we all can be – we just need to learn about finance.
[20:50] Susannah Streeter: What else can people in this position do?
[21:05] Ylva Baeckström: It’s quite complex, when you think particularly about gender and finance – and we have such gender stereotypical expectations of men and women when it comes to money. Men, women, people – regardless of what gender they identify themselves with... I would like to challenge the gender stereotypes.
Like I said earlier about the risk-tolerance, knowledge, confidence – just go against the trend – do something different. We need to communicate with each other – we need to make it cool to talk about money. That is something that we don’t tend to do. Why don’t we?
When I’m out for dinner with my friends, we often talk about our savings – and how we’re planning for pensions and properties – but we don’t all tend to do that. We need to make that a topic of general conversation because, all of a sudden, it becomes much more accessible.
[22:14] Susannah Streeter: Thanks, Ylva – it’s been fascinating.
That’s almost all from us for now – but, before we go, there is time for a quick stat of the week. So, we’re going to delve further into the details of the Barometer and how much single people spend – and, for this, we’re looking at alcohol and tobacco.
So, the question is, who spends more per head on alcohol and tobacco – is it single people or it is couples?
[22:50] Sarah Coles: [Laughs] Well, the odds are better for me getting this one right than usual because it’s 50-50 – but I am torn. Do I go with the ‘Bridget Jones’ stereotype of hard-drinking singles – or should I go with the Motherland notion that you drink more when you’re married and you’ve got kids? I think I’ll err on the side of ‘Bridget,’ and say single people spend more.
[23:13] Susannah Streeter: Yes, you’re right. Singles spend £95 a year more on alcohol and
tobacco (they fork out £447 a year, while couples spend £352 each). Although, if I’ve learned one thing from early ‘Bridget Jones’ films, it’s that some people are definitely racking up more of these costs than others.
That’s all from us for this time – but, before we go, we do need to remind you that this was recorded on 24th February 2025 and all information was correct at the time of recording.
[23:50] Sarah Coles: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Unlike the security offered by cash, investments and any income they produce can rise and fall in value, so you could get back less than you invest – and past performance is not a guide to the future. Tax rules can change and benefits depend on individual circumstances.
[24:05] Susannah Streeter: Yes – this is not advice or a recommendation to buy, sell, or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.
[24:15] Sarah Coles: So, all that’s left is for us to thank our guests: Helen and Ylva, and our Producer, Elizabeth Hoston.
[24:19] Susannah Streeter: Thanks very much for listening. We’ll be back again soon – goodbye!