* More Canadians say they can't afford to invest
* Younger people spending more, saving less
* Economic conditions, cynicism, influence saving rate
TORONTO, Jan 15 (Reuters) - With more Canadians saying they can't afford to invest, the country's big banks are struggling to persuade people that socking away a little money now is the only path to a secure retirement.
While Canadians once outpaced their U.S. counterparts in terms of savings, the nation's luck in avoiding the worst of the recession and financial crisis meant few learned the painful lesson of too much debt, and fewer than ever feel able to save for retirement.
Sixty-four percent of Canadians said they can't afford to invest more, up from 59 percent in 2011 and 53 percent in 2010, according to a poll released on Tuesday by Scotiabank, Canada's third-largest lender. Confidence in levels of current savings wasn't high, either, with only 19 percent saying they had already invested enough, down sharply from 29 percent in 2010.
"In general when it comes to affordability, (the poll numbers) show the strain that we've all experienced over the last couple of years with the economic volatility and global concerns out there," said Mike Henry, head of retail payments, deposits and lending at Scotiabank.
The online poll of 1,003 adult Canadians was conducted from Nov. 28 to Dec. 13.
It comes as little surprise that fewer Canadians feel able to invest these days, with government statistics showing households carrying more debt than ever before. The ratio of debt to personal disposable income in Canada has risen steadily since the late 1980s, rising to a historic high of 164.6 percent in the third quarter of 2011.
That surpasses the level in the United States and Britain, where consumer deleveraging has reversed rising debt levels, but remains about 10 percentage points below the peak reached south of the border before the housing crash in 2007, according to Statistics Canada.
Canada's household saving rate, calculated by dividing household savings by disposable income, is forecast to drop to just 3 percent in 2013, compared with 9.1 percent in Australia, 10.6 percent in Germany, 1.9 percent in Japan and 4 percent in the United States, according to the OECD's June 2012 Economic Outlook.
While banks will argue they just want to help their clients come up with financial plans, less investing means lower revenues for the huge wealth management arms of Canada's big five banks, which are jockeying to gain market share in mutual fund sales and advisory services.
With Canadians making New Year's resolutions to rein in spending and a deadline looming for tax-deferred retirement account contributions, wealth managers and investment advisers are now pushing the idea that every little bit of saving helps.
"If more needs to be saved, be diligent about finding ways to cut back on other expenses, as even a modest increase to retirement savings can add up," said John Tracy, senior vice president at TD Canada Trust, Canada's second-largest bank, which released a separate poll showing savings habits are weakest among younger Canadians.
The TD poll showed 65 percent of millennials - people born between 1982 and 1999 - feel they are spending too much money, compared with 56 percent of generation X and 44 percent of baby boomers. The online survey of 2,407 Canadians aged 25 years or older was conducted between Dec. 5 and 11 and weighted to be representative of the Canadian population.
The spendthrift ways of millennials probably doesn't sit well with banks that need a new generation to climb on board as investment clients.
While some argue the availability of credit and a need for immediate gratification have shifted cultural norms away from saving, the propensity of the younger generation to spend rather than save may be very rational, given the uncertain future even well-educated millennials face.
Why would a millennial, facing an uncertain job market, embrace retirement as a goal as much as someone who has had secure, stable job, asked J. Bruce Morton, a psychologist at the University of Western Ontario in London, Ontario, and a contributor to the TD study.
"It is a perfectly reasonable decision to enjoy the benefits that money affords now, if for you the future is something that you can't rely on."