The financial implications of living alone

Living alone is increasingly common at all ages.  Some people never partner.  Others decide to remain single after the dissolving of a relationship or through the death of a partner.  One relatively new and growing trend is termed living apart together (LAT).  LATs consider themselves in a committed relationship although they have chosen to retain separate addresses.  Most often, LATS are individuals who are already established in their careers, have built their families and often are financial stable.  Although they count themselves as partnered, LATs are counted as living alone for most research analysis.

The price of living alone

Living alone is a more expensive than sharing accommodations.  Although it’s difficult to determine the premium for living alone, a 50% or 60% mark-up is often used when calculating expenses similar to a couple.  It’s interesting to examine the degree of “lone living” in Canada.

Statistics Canada data from the 2011 census provides information on household formation.  This chart shows as a percentage, by geographic area, those living in lone-households versus all households (singles, couples, families, and non-families).   Although the numbers are calculated for all ages, they give some insight about the effect of retirement populations on the way households are formed.

Percentage of single-living households in a particular area:

• British Columbia and the Maritimes have older populations than Ontario. The large percentage of single households reflect this.
• Victoria is known as the retirement capital of Canada and also has a much higher live-alone ratio at 15.3%.
• Other cities known for attracting retirees also have high living-alone ratios including Halifax (12.4%), Kingston (12.2%), Moncton (11.4%) and Kelowna (11.3%).
• Commuter communities such as Oshawa have a much lower live-alone ratio at 7.6%. These communities attract families. They also are likely to attract multi-generational households where the grandparents assist with caregiving of the grandchildren.

Living with someone often means that there is an informal caregiver available almost around the clock if the need arises. Although living alone does not necessarily mean a person has no informal help, it typically means they receive less informal care. Even if family or friends live in the same community as the older person they are not as readily available to provide assistance when needed. This means that out-of-pocket costs for housekeeping or caregiving are likely to be higher for those who live alone.

Lee Anne Davies has worked as a consultant for insurance, wealth management, banking and financial education companies. She has a PhD in Aging, Health and Well-being and a Masters of Arts (MA) in Gerontology and Health Studies from the University of Waterloo and an MBA from Athabasca University’s Information Technology Management program. She’s also successfully completed the Canadian Securities Course and the Professional Financial Planning Course. To read more from Davies, visit her blog Agenomics.