TORONTO - Canadian investors will likely return to RRSPs this year after fleeing the retirement investment vehicle during the recession, according to a report from CIBC World Markets.

The report, issued on Monday, said that female and younger investors will lead the way as significant contributors, though it didn't provide any specific growth targets.

Last year, the number of Canadians who made contributions to RRSPs fell by 1.8 per cent, and even those who made an investment decreased their average contribution by 0.4 per cent, the report said.

The combined 2.2 per cent decline in total contributions marked the largest drop in contributions in six years.

CIBC senior economist Benjamin Tal said the improvement in stock markets over the past year has helped some Canadians regain their confidence.

"Investors are already testing the waters, with total net purchases of mutual funds rising for three consecutive months," he wrote in the report.

"And the lack of good investment alternatives in a world of low interest rates makes the decision to dive back into the stock market that much easier."

Tal noted, however, that markets have shown some softness in recent months, which might cause investors to pause before making any major financial decisions. But the latest turbulence has been far less volatile than in the past, which will help quash some of their concerns, he added.

RRSPs are a tax deductible way to save for retirement. Investors have until March 1 to contribute up to 18 per cent of the income.

Tal said that the disposable income of the average Canadian has risen by almost 3.5 per cent at an annual rate since last September.

"For the first time in many years, this extra cash is being saved not spent," he said.

"The savings rate in Canada has risen notably during the recession and, at just under five per cent, it is currently at a nine-year high. This means that Canadian households now sit on over $17 billion more in savings compared to the same period last year."

Tal also highlighted that a lack of confidence in both government and corporate pension plans has convinced some Canadians to look elsewhere for their financial future.

"If they have the means to do so, younger Canadians are more inclined to contribute to RRSPs than their older counterparts," he said.

Part of this has to do with "their cynical view of the sustainability or relevance of the Canada (and) Quebec pension plans, as well as the role employer-sponsored pension plans will play in their retirement."

A separate survey from Royal Bank late last year indicated that just 35 per cent of Canadians had contributed to an RRSP for the 2009 tax year -- the lowest percentage of contributors since 1996.