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More Canadians can’t afford to invest

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More Canadians say they simply can't afford to invest, making it tougher to build a retirement nest eggs, according to a poll released on Tuesday by Scotiabank.

In the bank's annual investment poll, 64 per cent of Canadians said affordability continues to be a high barrier to investing more -- a trend that has been growing over the past couple of years -- as the March 1 registered retirement savings plan (RRSP) deadline looms, up from 59 per cent in 2011.

While nearly 40 per cent of respondents say they plan to invest in an RRSP for the 2012 tax year, fewer people think they've invested enough.

Of those investors who cite affordability as a problem:

  • 77 per cent are not saving for retirement
  • 70 per cent do not have a written financial plan
  • 80 per cent feel they are not on track to achieve their retirement goals

"The key is to get a solid financial plan in place to help overcome affordability issues,” says Mike Henry, Scotiabank's senior vice president and head of retail payments, deposits and lending.

The findings in the poll, which was conducted online from Nov. 28 to Dec. 13, show most Canadians have an RRSP, but those numbers are slightly down at 56 per cent from 60 per cent last year. Some 44 per cent have a tax-free savings account (TFSA), down a bit from 48 per cent.

Nearly two-thirds of people continue to stash savings in a regular savings account, and roughly half invest in mutual funds and put their savings in a high interest savings account, the poll showed.

On the bright side, the survey found more people are trying to invest, with half starting before the age of 30. One quarter of young investors, defined as aged 18-34, have a financial plan.

When asked what major change they would make if they could do it all over, some 40 per cent said they would begin investing at a much earlier age. As well, some 23 per cent of people say they would spend less and put more of their money into their investments, up from 19 per cent in 2011.