Australia 'is heading for a retirement savings disaster'

Leaders at CPA Australia have warned that the country is heading towards a "retirement savings disaster".

A study conducted by the organisation has found that many elderly people are forced to spend their superannuation on settling their outstanding debts once they retire.

Representatives of the firm have urged the government to overhaul the system – particularly the current process that sees retirees receive a lump sum.

They argued that people approaching the end of their career see the money as a windfall and the temptation to blow the lot – rather than spreading it out sensibly – is too great for many to resist.

The research comes shortly after a study by ME Bank showed that Aussies are finding it increasingly difficult to add to their savings accounts.

Indeed, 53 per cent of households said they have nothing to spare once they have paid all their bills each month.

CPA Australia chief executive officer Alex Malley feels the superannuation process in its current form has "failed miserably".

"Many who have spent a large portion of their working lives under this system will still be relying on the pension," he remarked.

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