Revisit your retirement plans now

David Kuo, Head of Personal Finance at money website Fool.co.uk, comments on 100 years of the State Pension: "The State Pension, despite its many faults, continues to provide a useful safety net for many people in retirement.

"It has also come a long way from the five shillings a week that was first paid out on 1 January 1909. But at £90.70 a week, it is still just that - a safety net. We therefore urge people to revisit their retirement plans immediately.

"When house prices were rising rapidly, it was understandable to put retirement planning on hold. In fact, a year ago two out of seven people said they intend to release equity from their homes at retirement. Forty-year-olds were some of the most likely to consider equity release schemes1.

"But with house prices falling, anyone contemplating these schemes could find they have much less equity to release. It is therefore vital to consider alternatives without delay.

"A forty-year-old man only needs to put aside £7 a day to generate a retirement pot of over £200,000 at the State Pension age of 65. A forty-year old woman, who contributes the same amount, could have a pot worth £126,000 by the time she reaches the State Pension age of 60.

"Falling house prices has reminded us that our nest may not provide us with our nest-egg at retirement. However, there are better ways to fund a retirement. Putting aside as little as £7 a day can mean that you get to decide at what income you will retire on rather than letting the State dictate what you should get.

"It's more than an issue of jam today versus jam tomorrow. It's a case of deciding whether you want jam in your retirement or bread and dripping."