Policy researchers have issued a dire warning that Australian millennials could live in poverty when they retire unless the country’s superannuation system undergoes extensive reform.

The experts say members of Generation Y have low superannuation balances which they aren’t contributing enough to. They also have little chance of owning their own homes, so they’ll have much higher ongoing living expenses than the current generation of retirees.

Currently, roughly one-third of Aussie retirees have a comfortable level of income. Half of Australians over 65 rely on the age pension to cover their living costs. The researchers say considerably more millennials will rely entirely on the age pension, despite policy measures like the super guarantee.

The Centre for Independent Studies (CIS) found as recently as 2012, 40 percent of Australians had virtually no superannuation entering retirement. While this is troubling, the CIS said baby boomers were managing in their old age because most owned their homes.

“People who are retired have seen a 61 percent increase in their wealth between 2002 and 2014. For those who are 25 to 34, it’s just 3 percent,” Simon Cowan, the CIS’s research director, told ABC News. “That big difference is overwhelmingly driven by house prices.”

While the majority of Baby Boomers own their home, the Grattan Institute estimates Australian millennials aged between 25 and 34 on low incomes have just a one-in-five chance of entering the real estate market.

With dreams of home ownership fading, Mr. Cowan says the Federal Government must overhaul its superannuation system.

“The system is built around people owning their own home and basically owning their home unencumbered [by debt],” he explained. “If that ceases to be true, then our retirement system needs a rethink.”

Without major changes to the superannuation system, Mr. Cowan fears Millennials will struggle financially, with many falling below the poverty line.

“One thing we do see quite clearly is that people who own their own home have a much better living standard in retirement than those that don’t,” he said. “The people who are really struggling — they’re struggling not so much because of super, but because they have little or no savings, no home, and they’re completely dependent on the pension.”

The situation concerns young people like 26-year-old Sonia Arakkal who despite working in the financial services sector says her super balance is so low she hasn’t checked it in years.

“I worry, not just about my friends, but everyone in my generation,” she told ABC News. “It’s interesting because everyone in our generation is very empathetic and educated, and so we will march for marriage equality, but we won’t march for housing affordability because we don’t know just how dire the system is — whether its superannuation, housing, or even how much tax we pay into the system, compared to how much is spent on services for young people.”

While the Federal Government might overhaul its superannuation system to benefit young Australians, there are no guarantees. That’s why we believe you should take charge now. It’s never too early to start thinking about your retirement. Call Chase Edwards on 1300 854 833 to organise a financial health check. Our money experts will make an honest assessment of your finances and discuss how we can help you improve them now and in the future. This is an entirely free service, and you’re under no obligation to see us again. With nothing to lose and so much to gain, what are you waiting for? Pick up the phone and call us today.