Since the introduction of independent taxation in 1990, the tax system has largely concentrated on individual incomes, neglecting the complexities of household and family finances. The original intention was to promote equality, but it seems to have backfired by disadvantaging families with only one income earner.
For instance, there’s the issue of child benefits. The first child amounts to £26.05 weekly, while subsequent children receive £17.25 each week. This was universal support before 2013, but now, if one parent earns over £50,000 a year (currently raised to £60,000), they begin to lose benefits. By the time their income hits £60,000 (now £80,000), they receive nothing.
The catch? Eligibility hinges on individual incomes instead of the total household income. This means that a family bringing in £120,000 can retain all their benefits, while a single-income household earning £80,000 gets nothing.
There’s a real disparity here: single parents or widows often receive less assistance than those with two earners in the household.
A similar principle applies to non-taxable childcare benefits, where you can claim up to £2,000 per child annually, unless your income exceeds £100,000. A single-parent family with an income just above that threshold misses out entirely, while a dual-income family making £200,000 can still access full benefits.
And it doesn’t stop there. The current tax structure has also affected pensioners, especially with winter fuel payments — potentially worth up to £300 a year — which have been altered so that only those earning under £35,000 qualify.
Interestingly, while these payments are based on household income, eligibility checks focus on individual earnings. This means couples can earn a total of £70,000 and still receive payments, while a lone pensioner earning £35,001 sees no benefits at all.
Living alone doesn’t necessarily mean lower energy bills, either. According to statistics, the average pensioner spends about £1,352 annually on gas and electricity, compared to £1,669 for pensioner couples — that’s a substantial difference.
This disparity extends to other expenses too, like broadband, water, and home insurance. Single people only get a 25% discount on council tax, not the 50% many might expect. So, it stands to reason that single pensioners have to save significantly more for retirement than their married counterparts.
According to one pension organization, to enjoy a comfortable retirement, an individual needs around £805,000—on top of the state pension. Couples only need about £455,000 each for that same comfort. Interestingly, a single individual must save an additional £28,000 just to secure a minimum retirement lifestyle that couples can achieve with just the state pension alone.
And it seems the disparity continues even in inheritance tax matters. Assets passed to a spouse or civil partner are tax-free, allowing for the transfer of allowances, while individuals are limited to a £500,000 tax-free inheritance, compared to couples who can potentially pass on up to £1 million without a tax burden.
This system appears to impose a “singles tax,” affecting individuals even after they pass away, potentially burdensome for their families as well.
It’s noteworthy that around 30% of households in the UK are single-person households. Only then might the government fully recognize the damaging effects of this singles tax policy on so many lives.
