It gives them a decreased number of inputs during transactions after consolidating many transactions outputs into one, provides low transaction fees and more privacy.
With consolidating your UTXOs when the fees are low, you can make your next transactions cheaper, but you don't increase your privacy and you may even decrease your privacy.
Take note that with using multiple UTXOs in the same transaction, everyone can conclude they are owned by the same person and that may harm your privacy.
Between BTC segregated witness (segwit) starting with bc1q and BTC tap root that starts with bc1p;
Note that taproot addresses are also segwit.
Bech32 addresses (those that start with bc1q) are segwit version 0 and taproot addresses (those that start with bc1p) are segwit version 1.
My question now is, when sending does the sender and the receiver have to use the same address in order to achieve the reduced transaction fee?
No.