01/03/2012 12:54 EST | Updated 03/04/2012 05:12 EST

Canadians still plan to top up the RRSP despite tough economy, survey indicates

TORONTO - Despite weak returns and a squeeze on take-home pay, more than two-thirds of Canadians who participated in a recent bank survey said they still plan to contribute the same amount or more to their RRSPs in 2012.

About 69 per cent of people surveyed said they will invest the same or more in their Registered Retirement Savings Plans this tax year than the $4,700 they put in last year, the Bank of Montreal said in its report released Tuesday.

That's despite a "challenging" market environment that saw stock prices — and investment returns — fall in 2011 and New Year's Day increases in CPP and EI contributions that will erode take-home pay for average Canadians.

The survey is one of many that will be coming out over the next two months as financial institutions seek to promote their products and research consumer intentions during an intensely competitive RRSP season.

Of those not planning to make a contribution or to contribute less this year, 38 per cent said they have other expenses to deal with, while 20 per cent said they do not have enough money to match or exceed last year's contribution, the results suggested.

The Leger Marketing survey for BMO Financial Group indicated that 71 per cent of Canadians surveyed are also concerned about the performance of their RRSPs.

This lack of confidence comes after some Canadians saw the value of their investments tumble amid a 10 per cent decline on the Toronto Stock Exchange in 2011.

The online survey was conducted in late November based on a sample of 1,520 Canadian adults, with a margin of error of plus or minus 2.5 per cent, 19 times out of 20.

However, RRSP returns have been hit by the slumping stock markets, which reduce the value of corporate stocks held inside the investment vehicle and consumer confidence has declined since the survey was conducted in November.

Since the summer, global markets have dropped over fears the Greek debt crisis could lead to a global recession. Some big pension funds have lost about five per cent of their value in the third quarter alone.

"The volatility we have experienced in the financial markets over the past year has increased concern among Canadians about their ability to save for retirement," said BMO's Caroline Dabu.

"The current financial climate has made saving more of a priority for Canadians than ever before," Dabu said.

However, the survey also found 36 per cent are not confident in their ability to save for retirement, compared to just 18 per cent during the 2010 tax year.

Further complicating the problem of dwindling retirement savings is the fact that more than 60 per cent of Canadian workers are currently without any company pension plan.

The federal government is trying to determine how to cope with a pension crisis that could leave many Canadians with inadequate savings to maintain their standard of living in retirement.

The situation has worsened in recent years because falling markets have hit investment returns and Canadians are living longer, while fewer have company pension plans.