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Being single offers a unique blend of freedom and financial responsibility. On the one hand, your independence means you have complete freedom over your financial planning. However, it can also have drawbacks (e.g. no partner to split expenses or help shoulder financial burdens).
This is particularly pressing as the UK cost of living continues to rise, especially for housing in high-demand areas. In this guide, our Teesside financial planners offer some expert insights into how a single person can thrive financially in 2025.
Setting goals
Many single people “drift” through life, merely living paycheque to paycheque. This can get very dispiriting. You quickly start to feel like you are “spinning wheels” rather than moving towards an objective. Here, take some time to reflect on your short, medium and long-term goals.
What do you want to achieve? You may want to buy a first home, build a pension pot, or start a business. Then, consider what kind of money you need to realise these goals.
One of the advantages of being a single person is that you have the autonomy to make fast financial decisions. For instance, by taking an hour to track and categorise your spending, you might discover some “quick wins” to cut back on needless spending, freeing up money for saving and investing.
A key area to examine is housing. The average UK rent outside London is over £1,300 a month in 2025. Here, you might consider options like flatshares with like-minded individuals – ideal for reducing costs without sacrificing lifestyle. Another option could be to relocate to a lower cost area that offers significantly lower living costs.
Of course, being single means you also bear all the risk if you miscalculate. Having a personal financial plan (or speaking with an adviser) mitigates that risk.
Prioritising pension and savings
This next point might sound laughable, especially given the absence of dual income or spousal pension benefits for a single person. However, it is vital to consider your long-term future, not just immediate financial needs.
Consider, for instance, what could happen if you suddenly fell seriously ill, or got too injured to work for a number of months. Without a partner to lean on in case of job loss, illness, or other crises, having a buffer of 3-6 months of essential expenses is critical.
If this task seems too immense, then start small. Even £20 per month (and steadily increasing it) could provide a much-needed buffer in an emergency. One option is to open a high-yield easy-access savings account (many UK providers now offer rates above 4.5% in 2025).
It’s also important to be proactive about retirement planning. The earlier you start building up a pension, the more time your funds have to benefit from the power of compound interest. Over a lifetime, this helps take pressure away from your finances – something you will thank yourself for in the future (believe us!).
If you are comfortable with a higher risk level ,and you have a longer investment horizon in front of you, it might be possible to be slightly more aggressive with investing. A financial adviser can guide you through the options here, helping you keep more of your hard-earned returns by using tax-efficient “vehicles”.
For retirement, pensions will likely be a useful vehicle. Not only are all dividends, interest and capital gains free from their respective taxes inside this “wrapper”, but you can also claim tax relief on your contributions.
This is equivalent to your marginal rate – e.g. a basic rate taxpayer effectively gets a 20% “boost” on their contributions. Moreover, if you are contributing to a workplace scheme, your employer is required to put in at least 3% under the UK’s auto enrolment rules.
Check whether your employer offers any extra benefits you could maximise. For instance, some offer a “matching scheme” for a worker’s pension contributions (e.g. up to 10%). This effectively represents free money towards your retirement. If you can afford it, this can be very worthwhile.
Be as strategic as you can about tax. For example, think about ways to max out your ISA allowance (£20,000 for 2025). If you’re under 40 and saving for a first home or retirement, consider using a Lifetime ISA (LISA). Here, the government will “top up” your contributions by 25%, up to a maximum of £1,000 each year.
Invitation
We hope this content gave you more clarity. To discuss your own financial plan, please get in touch to arrange a free, no-commitment consultation with an adviser here in Teesside.
Your capital is at risk. Investments can go down as well as up. Past performance is not indicative of future results. Tax treatment depends on individual circumstances and may change. Content is for information only and not investment advice. Any decision to invest is the reader’s own. Diversification is key to managing risk. Market volatility affects investment values. Inflation erodes savings. Liquidity risks may prevent quick access to funds.