Single? Six dos and don’ts for retirement

Living alone is becoming more common. There were 8.4 million people living alone in the UK in 2024, according to census data released by the Office for National Statistics (ONS) in July last year, an increase of 11% from 7.6 million in 2014.

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While single-person households may be down to choice or circumstance, the benefits to living alone include not being responsible for a partner’s debts and having autonomy over financial choices, large and small.The benefits of solo dwelling are encapsulated for me by Kate Bolick in her book Spinster: Making a Life of One’s Own (2015) when she describes buying a McDonald’s on her way home from a party.

Bolick writes: “I peeled off the warm paper wrapping, and bit into the most delicious Big Mac I’d ever eaten. I chomped and strolled as slowly as I could, prolonging the delectable realisation that waiting for me at home was nothing but an empty bed into which I’d crawl naked and drunk and stinking of fast food, disgusting nobody but myself.”

I don’t share this extract because I think it illustrates how everyone wants to live/eat at every age, but I think it does demonstrate a single person’s freedom to do as they please with their life – and money.

Yet living alone obviously has financial drawbacks, including covering all the bills yourself, such as rent or mortgage, council tax, broadband, and the TV licence. Solo dwellers must also manage food and energy prices alone, which can be daunting if there’s a big spike in inflation. If you suffer a period of ill health while single, there’s no partner’s salary to fall back on either, so it’s worth exploring whether you have adequate insurances in place. Claer Barrett, of the Financial Times, wrote an insightful piece in January this year drawing attention to the “single investment gap”, in which single adults are likely to have less left over at the end of the month for investing compared with couples.

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For single women thinking about retirement, additional financial challenges can arise because of the gender pay gap, which means smaller pension pots for women. It also often falls to women to care for elderly parents, possibly meaning part-time work. Any career breaks could also stymie progression up the career ladder, further hitting pension pots.

Women who become single because of divorce or the death of their spouse, can also have inadequate pensions, particularly if they have had career breaks, perhaps to care for children. If you are thinking of getting divorced, don’t overlook your pension rights when it comes to your spouse’s pension. 

Retirement wealth gap

Unsurprisingly, research published by interactive investor reveals a significant gender wealth gap between men and women at retirement.

Our Great British Retirement Survey 2025 found that “women have lower financial expectations for retirement, expecting £150,000 pension wealth on average by retirement, compared to £250,000 for men…Single people also expect lower pension wealth by retirement and have lower cash savings than married people.”

So, amid calls for the world of work to become fairer, financial planning for retirement is down to single people, and depending on your financial literacy, confidence, and interest in the subject, this may either be a walk in the park, or feel as though you have a mountain to climb.

If you fall into the latter category, there are steps you can take to ease you towards a happy retirement.

1) Do plan, plan, plan and embrace financial education

One of the key findings from the interactive investor Great British Retirement Survey 2025, which surveyed 9,000 people, was that more than a decade after the introduction of auto-enrolment for workplace pensions, 42% don’t know the pension pot required for a comfortable retirement and 34% of pension savers don’t know how much they expect to have saved by retirement.

Financial education wasn’t on the agenda for many of us at school, but it’s never too late to learn if you don’t know as much as you’d like about investing and pensions. I’m talking up my own book here, but signing up to newsletters at interactive investor, such as How to Invest, or raising questions with other investors on the ii Community app could inform your own decision.

Life expectancy in the UK for men and women has increased over the past 40 years, and some individuals could be spending close to 30 years in retirement. That is a lot of time for hobbies and holidays, but how will you fund them, as well as your living costs?

The Pensions and Lifetime Savings Association (PLSA) has useful projections (see below) for the sort of annual income you will need for a ‘minimum’, ‘moderate’ and ‘comfortable’ standard of living. Most people will have a workplace pension that, along with their state pension, will go towards the retirement income target.

Figures published below can help you consider what income to aim for in retirement. Checking the current amount you have in your pension(s) lets you track progress towards your goal.

One thing to consider if you are in your 40s, or older, and thinking of extending your mortgage term, is whether this is the right step for you and whether you will be able to pay off the mortgage in retirement. The Great British Retirement Survey 2025 revealed that around one in five (20%) retirees are renting in retirement, with 5% still carrying mortgage debt.

2) Do find out your state pension age and consider an ISA

To find out what age you can start receiving your state pension, visit this government website. You can also get a state pension forecast. You don’t necessarily need to take your state pension when you are eligible to do so, and you might be able to increase the amount you get if you delay your pension.

It’s entirely possible that the state pension age will continue to rise, and you may need/choose to retire before state pension age, so any money you have saved in an ISA or workplace pension (accessible under the pension freedoms from age 55, or 57 from 2028) can give you an income until you can draw on your state pension.

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One of our specialist writers, Rachel Lacey, wrote recently about why it makes sense to have both an ISA and a pension. People often use ISAs to avoid tax issues with their pension.

3) Do work on your workplace pension

Start paying into a workplace pension as soon as you are financially able to, so you can benefit from compounding over time. Compounding is interest earned on interest earned, which has a snowball-like effect and explains most investment growth. If you invest £1,000 into a fund, which returns 5% in one year, you earn £50. The next year you’ll earn 5% on £1,050, which is £52.50. And so it goes on.

Your employer will often match your own pension contributions up to a point, and it is well worth taking advantage of this if you can afford to. For example, if you contribute 6%, they might match this, so a total of 12% is going into your pension each month, plus tax relief, which can be thought of as more free money, but from the government.

Throughout your working life, if you can afford to, try upping your contributions when you get a pay rise or a bonus, as compounding means that even putting some of that extra money into the pension will benefit you when you come to retire.

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If you are going through a period of financial hardship, stopping your pension contributions may be a necessity, but if you can cut back on something else instead, do it. Opting out of a company pension for a few years can significantly reduce the value of your final pot, since stopping your own contributions also means you miss out on employer contributions.

Don’t forget to hunt down any old workplace pensions, however small you think the pot might be. That money is still valuable and, invested over time, could amount to a nice sum. This service can help reconnect you with old pensions.

Check that you are taking enough appropriate risk with your pension given your age. Some workplace pension funds are defined as ‘cautious’ (meaning that they are made up of a smaller proportion of riskier assets, such as shares), as you might be investing too conservatively to meet your desired pension income target.

Also, be mindful of ‘de-risking’ when it comes to your pension fund. This is where ‘lifestyle’ type funds automatically start to de-risk in your 50s. It’s a good idea to think about whether de-risking will be an issue, especially if you intend to leave your pension invested and draw down the income during retirement, which basically means taking a percentage of it each year. If you want to draw down the income, then you will still want the fund to have some ‘growth’ assets, so that your investment can support you during your lifetime.

You might also want to consider consolidation if you have multiple defined contribution pension pots to avoid paying several fund charges. But it’s vital to check your pensions before consolidating to ensure that you won’t be giving up any benefits, such as guaranteed annuity rates, for example.

4) Do sidestep this costly mistake

Avoid taking out the tax-free lump sum you are entitled to under the pension freedoms (25%) when you turn 55/57 if you are only going to leave the money in cash in a bank account paying measly interest. Unless you are going to put that money to immediate use, i.e., paying off your mortgage, for example, you are stopping the money from continuing to compound.

5) Don’t disregard a SIPP

A SIPP enables you to choose your own investments for your pension. We explain what a SIPP is and the benefits of opening one in detail here, and you can read SIPP customer stories to find out more. There are also SIPP FAQs.

6) Don’t forget your health

Illness in your twilight years is another reason to make sure you start saving into a pension as soon as you can afford to do so. If you have to give up work or reduce your hours earlier than you planned, you will have a bigger pension to fall back on.

One of the findings from the ii Great British Retirement Survey 2025 was that concerns about not being able to afford good-quality long-term care had risen between 2023 and 2025 among all age cohorts, except for those age 61-65 where it had remained the same.

Long-term care could feel a long way off if you are in your 30s or 40s, but people often turn to family to help them as they grow older, and for the child-free single person, thinking about how you might fund care is worthwhile.

This article was updated in March 2026.