Posted on 30th May 2014

Ticking Timebomb of the Singleton Home Owner


By Martin Williamson, Head of Residential Property, Latimer Hinks Solicitors

The home-owning landscape has certainly changed over the last 40 years from a time when the average household consisted of a couple with 2.4 children to a single-person home. New research reveals that increasing numbers of people are living alone and, worryingly, they do not have a financial back-up plan should things go wrong.

According to the report by LV home insurance, the number of single-person households has more than doubled to 8.7 million UK adults, compared to 3.8 million in 1974. This has happened against a steep increase in living costs in recent years. The biggest rise in solo-dwellers is amongst those aged between 35 and 44. In 1974 just 148,000 single households were made up of people aged between 35 and 44, but this has since increased to 1.2 million.

Not only are more people living alone, but life expectancy has increased as well. Those now aged in their 60s and 70s today will live alone for 10 years over the course of their life while todays young adults (aged 20-30) can expect to live alone for a total of 15 years. This is due to a combination of people living longer and lifestyle changes such as marrying later and higher divorce rates.

While rising divorce rates do contribute to this trend, of those living alone almost half (49%) do so either because they enjoy their independence, dont feel ready to live with somebody else or have actively chosen to live alone, as they may value their own independence.

However, the reality of living alone means that single people are faced with the entire burden of the households living costs. Solo dwellers spend £1,826 a year more on housing and utilities than an individual in a couple, even when taking into account the single persons council tax discount. This is due to single households paying £1,392 more on mortgage and rent than someone living in a couple, £294 more on utilities and £140 more on household goods and services. Overall, a single dweller will spend six per cent more compared to someone living as a couple in a household.

The financial implication of having to spend proportionately more on the cost of living means that those living alone have less money to spend on lifes luxuries such as dining out, shopping and leisure activities, and also less to save or put into a pension pot. As a result, the average couple household will have £6,000 in savings three times more than the average solo dweller who has just £2,000 to fall back on.

Most worryingly, almost two thirds of all solo dwellers (60%) dont have a financial back up plan, such as income protection, that would enable them to fund their lifestyle should they be unable to work. Of those who have a back-up plan, almost a third (31%) say they would have no other option than to rely on their savings if they lost their job.

Yet at the same time, if left to rely on their savings, almost a quarter (24%) of solo dwellers claim that their savings would run out within a fortnight. This implies that many back up plans would be inadequate if they are unable to work for an extended period.