Despite several years of warnings from Ottawa about the perils of debt, Canadians’ debt levels are heading upward. At the same time, Canadians have large amounts stashed in no- or ultra-low-return investments.

These are some of the conclusions from two recent studies touching on Canadians’ finances.

One study, an annual poll by Royal Bank of Canada (RBC), concluded that personal debt levels rose substantially over the past year, with average (non-mortgage) debt jumping to $15,920 from $13,141 in 2012.

Anxiety regarding debt also is rising. Among those surveyed for the RBC poll, 38% said they are anxious about their debt levels, compared with 34% of those surveyed a year ago.

The overall numbers probably are skewed by the devastating floods that hit Alberta this year. Personal debt levels soared by 35% in Western Canada, vs a 10% increase in Eastern Canada, compared with last year. People in flood-hit Alberta reported their personal debt rose by 63% from 2012. However, 41% of poll respondents in Eastern Canada reported being anxious about their debt, compared with 34% of those in the West.

“It was very surprising for us to see the increase that we saw because of the two previous years, [in which] Canadians across the board have been retrenching,” says Kim Taylor, director of personal lending with RBC. “[Survey respondents] have been telling us that they have been looking for ways not to incur more debt, either by deferring some of their spending or just cutting back on some of their expenses.”

Taylor notes, however, that the debt picture varies greatly among individuals. An indebted student just graduating from university is in a very different situation than a couple with young children and a mortgage or empty nesters gearing up for retirement. “What is important,” Taylor says, “is having a plan and a road map to pay [the debt] back, in line with their income and financial situation.”

On the other hand, many Canadians may be far too cautious with their finances. A global study by New York-based BlackRock Inc. found that while Canadian investors are more optimistic about their finances than investors in other markets, there are worrisome signs. Less than two-thirds of Canadians surveyed said they are confident about reaching retirement goals. Canadians also are more worried about paying debts than those in other countries.

Apparently, it’s not for lack of trying. The BlackRock study found that “funding a comfortable retirement” is the top priority for 44% of Canadians, compared with 35% of survey participants globally. And, even though Canadians generally are more worried about retirement and debt than people in other countries, almost two-thirds (60%) of Canadians surveyed rely on an advisor — more than double the global average of 24%.

“It is a tough one to answer,” said Noel Archard, managing director with BlackRock Asset Management Ltd. of Toronto, on the question of why Canadians get more financial advice yet are more stressed about money. “People [here] are more sensitized to needing some reserves, and then you get the crunch of the last few years. Income hasn’t really gone up and you still have a basic household spend.”

Canadians’ investment strategies could be partly to blame: 43% of the savings and investments held by survey respondents are in low- or no-return cash accounts.

“That conservatism is a bit of a catch-22,” Archard says. “You are sitting on heavier cash positions, so you are not earning as much; so you can’t pay down some of the debt load. And you are keeping cash positions because you have a debt load.” And need to have funds to service that debt.  IE