The Singles Tax: Why Flying Solo Costs More Than You Think

More New Zealanders are living alone, and Stats NZ expects the trend to continue as the population ages. The economics of going it alone are stacked against them, but not hopelessly so.

For many New Zealanders wondering whether it is more expensive to live alone, the short answer is yes. Roughly 14 percent more expensive for working-age adults, and far more when it comes to housing. Call it the singles tax: a persistent surcharge on everyday life when there is nobody to split the bills with, and one which never appears as a line item on your tax return.

Being single can feel like a financial penalty. You cover the rent by yourself, buy groceries packaged for a family of four when there is an audience of one, and watch couples halve everything from broadband to Uber rides.

The numbers come from Shamubeel Eaqub, an economist who crunched New Zealand household expenditure data and found adults aged 25 to 49 living alone spend roughly 14 percent more than their coupled counterparts. Housing costs are 53 percent higher per person, health costs 40 percent higher, and communication expenses 41 percent higher. If your bank balance seems to evaporate faster than your flatmate-less existence would suggest, you are not imagining things.

The size of the gap depends on age. Singles aged 50 to 65 spend 11 percent less than couples overall, and 9 percent less in the five years before retirement, while still paying 35 to 53 percent more on housing and utilities. The pattern holds at every age: living alone costs more where the bills are fixed, and older singles make up for it by spending less on everything else. Stats NZ household spending data points the same way. In 2023 a one-person household spent $807.90 a week and a couple $1,611.30, almost exactly the same per person. The single person's money went on housing; the couple's went on food, transport and treats.

Stats NZ projects one-person households growing from 393,000 to 465,000 between 2018 and 2043, mainly because of an ageing population: by 2043 nearly two-thirds of people living alone will be 65 or over. People are marrying later, divorce remains common, and more New Zealanders live alone in later life, particularly women. Many others choose the single path deliberately, seeing independence as its own reward. Either way, the financial realities of solo living deserve a closer look.

What is the singles tax?

The singles tax describes the higher per-person cost of living when there is nobody to share fixed expenses with. Economists have a formal framework for this: the OECD equivalence scale assigns a single adult a weighting of 1.0, but each additional adult in the household only adds 0.5. A couple needs about 1.5 times the income of a single person to maintain the same standard of living, well short of double. The second person gets a 50 percent discount on life, courtesy of shared rent, one internet connection, and a fridge running whether there is one person or two.

The same framework is used in the UK, with the same conclusion: single-adult households need proportionally more income to achieve the same standard of living as multi-person households. The pattern is a structural feature of modern economies everywhere, well beyond New Zealand.

Marcus Mannering, wealth and lending specialist at Become Wealth, unpacks it this way: "Calling the extra costs single people carry a tax might be a stretch, since nobody is collecting it. But the point stands. Couples have economies of scale when it comes to paying for all manner of things, from the rent down to the power bill, and a single person pays full price for each of them."

Where the singles tax hits hardest in New Zealand

Housing

Housing is the big one, for renters and owners alike. Consider a 38-year-old professional renting alone in a central city on a salary of $95,000. Suppose a one-bedroom apartment is $500 per week. A couple sharing a comparable two-bedroom at $650 per week each pays $325. The solo renter is spending about 54 percent more. Owners carry the same weight: mortgage repayments, rates, and insurance all fall on one set of shoulders instead of two. When you are renting or buying on a single income, the maths is simply less forgiving.

Groceries

Bulk buying only works if someone eats the bulk. A single person buying a bag of salad, a loaf of bread, or a tray of chicken thighs often throws away what they cannot finish before it turns. Per-unit costs are lower in larger packs, but waste erodes the saving.

Insurance

Some insurers offer couples discounts on life and health cover. Travel insurance is often cheaper per person when purchased as a pair. Even car insurance can be marginally better for multi-policy households. The single person pays full freight across the board.

Retirement

In retirement the gap widens considerably. A single person living alone in a metropolitan centre needs about $705 per week for a no-frills retirement, while a couple spends about $937, roughly $470 per person. From 1 April 2026, NZ Super pays a single person living alone about $555 per week after tax (M code), while each member of a qualifying couple receives about $427. The higher single rate narrows the gap: a single retiree living alone is still about $150 a week short of no-frills, while a couple is about $83 short between them.

A third of retired households are single people living alone, and singles are more likely to rent than own. Single retirees spent $8,523 a year on discretionary items against $24,461 for couples, about $12,000 per person. The single retiree's money goes on necessities; the couple's stretches to choices. Singles are also more likely to report having no insurance or savings. For anyone building a retirement income on one income, the margin for error is thinner and the consequences of a financial shock are more severe.

Why single parents pay a double penalty

Single parents face the singles tax and the cost of children simultaneously, on one income. Government support mechanisms exist, including childcare subsidies and Working for Families tax credits, but they come with conditions and phase-outs which can create perverse incentives. Extra hours at work can leave a parent barely better off.

Among single-parent families, 30 percent face effective marginal tax rates above 50 percent, against 13 percent of two-parent families. Consider a single parent earning the median wage and working between eight and 20 hours per week. Increasing their hours could mean keeping as little as 10 cents of every additional dollar earned, once income tax and benefit abatement are factored in. The financial incentive to take on more work is, at best, modest.

How the singles tax affects men and women differently

The singles tax hits women disproportionately. Women are more likely to live alone, particularly in older age, and are more likely to have taken career breaks to raise children or care for family members. Those breaks compound over decades into lower KiwiSaver balances and reduced lifetime earnings. When the singles tax is layered on top, the financial pressure intensifies.

Men face a different set of challenges. Single men are less likely to access family-oriented subsidies and workplace flexibility. Single men and women alike describe a social pull to spend on dating, going out and the gear which goes with hobbies, and it matches what we see with clients. The New Zealand data is thin here. The spending gap Eaqub measured is not split by sex, and the retiree study above finds couples spend more per head on choices than singles do. US spending surveys show single men spending about a third more on entertainment than single women, though those are American numbers. Whatever pressure a single person feels to spend, it is a budgeting choice rather than a structural cost. The fix is the same as for anyone: decide what the social spending is worth to you and fund it deliberately.

The financial advantages of living solo

Living alone also has financial advantages, and for some people they more than compensate for the higher per-person costs.

• Complete financial autonomy. Want to put your entire bonus into a share portfolio instead of a new sofa? Done. No negotiations, no compromise, and absolutely no arguments about whether the family needs a second car. Your money reflects your priorities and nobody else's.
• Simpler budgeting. One income, one set of expenses, one person's spending habits to manage. Money is a common source of conflict in relationships. Singles skip the drama entirely.
• Freedom to take calculated risks. Relocating to a cheaper city, house-hacking with flatmates, pivoting careers, or investing aggressively in your 30s are all decisions easier to make when nobody else depends on your income staying stable next month.
• Lower exposure to lifestyle creep. Couples often ratchet up spending to match combined earnings: the nicer suburb, the bigger car, the more expensive holidays. A single person's lifestyle tends to scale with their own ambitions rather than a joint standard of living they never explicitly agreed to.

How to reduce the singles tax on your finances

Shared housing and split bills will always be cheaper. Deliberate decisions can narrow the gap.

• Adjust your budgeting framework. The popular 50/30/20 rule (50 percent on needs, 30 percent on wants, 20 percent on savings) assumes your fixed costs are roughly half your take-home pay. For a one-person household, housing and utilities take about a third of weekly spending ($263 of $808 in 2023), before groceries, insurance, and transport. A more realistic starting point for many solo earners is 60/20/20: 60 percent on needs, 20 percent on wants, 20 percent on savings and debt repayment. The savings target stays the same. The adjustment simply acknowledges the structural cost premium and stops you from feeling like a failure every time the rent goes out.
• Share housing costs without sharing your life. Flatting is the most direct solution. A professional sharing a three-bedroom house with two others in an Auckland suburb might pay $280 per week instead of $500 for a studio alone. Co-living arrangements are growing in popularity and are not limited to people in their twenties. If you value your own space, consider a property with a minor dwelling or granny flat and offset your mortgage with rental income.
• Automate your savings ruthlessly. Without a partner's income as a safety net, your savings rate matters more. Set up automatic transfers to your KiwiSaver investment, a dedicated emergency fund, and a separate investment account. The money moves before you see it, which is the point.
• Insure what a partner's income would cover. In a couple, one person's income can keep the household running if the other falls ill or loses their job. Solo, you have no backup. Income protection insurance and adequate health cover are structural necessities for single-income households, not optional extras.
• Negotiate harder and switch more often. Loyalty benefits, bundled packages, and provider switching are open to singles and couples alike. Power companies, insurers, and telcos compete for customers. A 20-minute phone call or comparison-site visit can save hundreds per year.

How New Zealand's settings compare with the rest of the world

Singles pay a premium everywhere, and New Zealand's policy settings magnify it. Unlike Australia, which shields the first A$18,200 of income from tax, New Zealand taxes people from the first dollar earned. There is no tax-free threshold.

Other countries at least soften that reality through the tax system. In the United States, for example, married couples can file jointly, doubling tax brackets and the standard deduction and often paying less tax than two single earners on the same combined income. The US system treats a household as an economic unit. New Zealand's income tax treats every adult separately: two people sharing housing and bills are taxed exactly the same as two people maintaining separate households.

There are bright spots. NZ Super pays a single person living alone about 30 percent more than each member of a couple, the one place the system recognises living alone costs more per head. KiwiSaver is structured around individual accounts, so a single person's retirement savings build on the same terms as anyone else's.

But on day-to-day costs, the burden falls squarely on the individual. Across the OECD, housing, power, insurance and transport costs simply do not scale in proportion to household size. In countries with larger housing subsidies or deeper social safety nets, that gap is softened. In New Zealand, with high housing costs and relatively modest support, it is felt in full. The result is a quiet premium paid by people who live alone, baked into the way all our systems fit together rather than into any one policy.

Turning New Zealand's singles tax into a financial advantage

The singles tax is measurable, durable and manageable. The people who handle it best recognise the structural cost premium, make deliberate financial decisions to offset it, and channel the advantages of autonomy into long-term wealth building.

You are the sole decision-maker of your financial life. Your retirement, your emergency reserves and your insurance all rest on decisions only you will make. Accept the cost premium, exploit the freedom, and build something worth having.

Generic rules of thumb tend to fall down here. A first conversation with a Become Wealth adviser gives a single earner a clear picture of where the money goes and an honest read on whether the savings rate can fund retirement on one income. It also checks the cover which stands in for a partner's income if illness or job loss lands. Initial consultations are complimentary.