The brain continuously integrates rapidly changing visual input across eye movements to maintain stable perception, yet the precise mechanisms underpinning dynamic working memory and how these break down in brain diseases remain unclear. We developed a novel eye-tracking paradigm and computational models to investigate how spatial and colour information are updated across saccades in the human brain. Our findings reveal that saccades selectively impair spatial but not colour memory. Computational modelling identified that spatial representations are maintained in a dual eye-centred frame of reference which is actively updated by a noisy memory of saccades but is vulnerable to interference. Using this model, we found that specific mechanistic failures in initial encoding and memory decay, rather than the saccadic updating process itself, account for spatial working memory deficits in Alzheimer’s and Parkinson’s disease. These results provide a mechanistic understanding of how dynamic spatial memory operates in health and its disruption in neurodegenerative disorders.