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How to cut the cost of being single for everything, including car insurance

Last week I went out for dinner (yup, the novelty of it is still intoxicating). I tripped my way through the big glass door and asked if they were still serving.

The otherwise painfully polite woman at the little rostrum thing looked over my shoulder and asked if it was ‘just me’.

I replied: “Yes. Yes, it was.”

But while I believe that taking yourself out for a “dinner for one” is the height of self care, the flicker of reaction on her face told me I was about to get the worst seat in the house simply because I was there by myself.

It seems that as a solo customer, I was a bit of an unknown.

I wasn’t their target market, I wasn’t what their business model and profit margin predicted, and I was about to be side lined for it, all while paying more per person than the average couple with their joint bottle of wine and shared starter.

It’s a scenario that plays out across society – the quiet marginalising of people going about their independent lives because they don’t quite fit a box.

To make matters worse, it costs those people extra money – a lot of it too.

The Office for National Statistics (ONS) reckons that while cohabiting couples spend around 83% of their disposable income, single people fork out 92% of theirs on everyday costs – an increase of nearly 11%. Yikes.


Clean up your act

You don’t even have to leave the house to experience this “singles premium”.

Live alone and you’ll obviously be liable for the whole rent or mortgage payment as well as all the utilities and council tax payments.

But that mortgage was probably harder to get hold of because you applied as a single person.

No joint income boosted the amount you could borrow, so your mortgage may be limited to around 4.5 times your annual income, stretching occasionally to five times or, at a push, six times your salary, which will severely restrict your options, especially in a runaway housing market.

Plus, though few lenders will say it explicitly, the fact that you’re out there embracing your own life can sometimes mean you’re considered a greater risk for borrowing, even if it is because cohabiting couples appear to present a more ‘settled’ and therefore reliable picture.

All of which means that as a single applicant you may either be offered a smaller mortgage than you need, a mortgage at a higher interest rate, a combination of the two, or you’re refused completely.

To reduce the chances of that happening, make sure your credit rating is squeaky clean, including clearing your debts, before applying.

With that hurdle overcome, your taxes, water, gas and electricity are all based on certain assumptions including that the default unit in a household is a couple.

You don’t even have to leave the house to experience the “singles premium” and find yourself out of pocket

The single premium really starts to sting when we venture away from home though, even if it’s down the road in the car.

Research from comparethemarket.com showed that single drivers were at twice the risk of having an accident compared to their married counterparts, and having an accident on your record is a key factor in higher insurance premiums.

Holidays

Holidaying alone can be an expensive business with many hotels charging a lone traveller the same price as a couple, especially during the school breaks.

Single travellers argue that this penalises them unfairly, but tour operators justify the charge by saying that the cost of providing a room – heating, lighting, cleaning and so on – is the same regardless of how many people occupy it.

Children

While life with or without a partner doesn’t necessarily rule children in or out, couples are still more likely to have little ones.

Recent research from LV shows the cost of raising a child to 18 in the UK stands at £71,611 for a couple or family. But even here singles don’t escape, because if you are a single parent or guardian, that bill leaps to £97,862.

As with many other things, the coronavirus pandemic has likely made this financial disparity between singles and couples even worse.


Calculation is key

Here’s how to fit back – and pay less.

While we all wait for financial and utility companies to realise that almost eight million people live alone in the UK, and that single person households account for a third of the population in some regions, it’s worth getting in touch with them to ask about reductions for lower use.

While you’re at it, make sure your bills are based on real readings rather than estimations based on two or more people using every appliance going and sloshing through double the hot water.

In fact, installing a meter that tracks your water usage could be a smart move. According to Citizen’s Advice, a good rule of thumb is that if you have fewer people living there than you do bedrooms, you could save significant sums.

The meter will be fitted free of charge and many water companies will now give you up to two years to trial a meter and switch back if you’re unhappy or not saving money.

To find out if you could save, visit http://www.ccwater.org.uk/watermetercalculator/.

Single occupancy households, regardless of income or savings level can apply for a 25% discount on their Council Tax too by contacting their local authority.

If you are not married and want to cut the cost of your insurance, consider adding a friend or flatmate who is a low-risk named driver – typically someone who is older, more experienced and free of recent claims or convictions – to your car insurance policy.

However, resist the temptation to say the low-risk motorists is the main driver as this is known as “fronting” and is against the law.

It's worth considering carefully the model you drive, its power and security features as this can impact premiums.

Be very precise with your mileage calculations, consider installing telematics or a ‘black box’ and pay your premiums in one go to keep costs to a minimum.

While your travel insurance shouldn’t theoretically come in any more expensive, book into a hotel, arrange a tour, buy a travel package and those five words of doom ‘based on two people sharing’ can and do crop up almost instantly.

So, you may come across an explicit single supplement, or you might find that if you run the booking based on two people, your total bill is different, up to 100% different.

Book very early or at the last possible moment, preferably out of season or on an atypical day of the week.

If the place isn’t rammed with full-price-paying couples or families, you’ll have a better chance of negotiating on the supplement. And you should always try to negotiate the supplement away.

Just like you are in every other aspect of life, be independent. Be bold. Think laterally. And always, always ask the question. You might get the correct answer one of these days.


Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.

3 things to do
right now

1

Many government-backed benefits are based not only on your individual wage, but also on total household income. So, if you live alone, this could mean that you are eligible for assistance and not know it. This is especially important if you have children as there are several tax breaks and benefits which are in place to help single parents meet the cost of childcare. To see if you are missing out, visit Turn2Us’s handy benefits checker, which claims you need just ten minutes to complete.

2

Apply for a reduction from your local council, visit www.gov.uk/apply-for-council-tax-discount

3

Cooking for one can be tricky – after all, not many recipes are created for a single serving, but rather catering for four to six people. If you don’t want to waste food – or the money you’ve spent buying it – look at lovefoodhatewaste.com, which has a portion calculator. Plan a weekly food menu and use the website to calculate how much of each ingredient you need to buy on your food shop.

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