Plan now for future Pension needs

This means that anyone aged 45 or younger today would not now receive their State Pension until they turn 70.

This makes perfect sense, from a budgetary point of view. Many of us may have to work longer, and pay National Insurance contributions as we go, and our retirements will be shorter, so that we are taking our contributions back (as the pension) for several years less. More of us - those who do not reach 70 - will not take our NI contributions back at all.

For those that do, however, there is some good news. Since 1980, the State Pension had been linked to retail prices, with the result that it had been gradually losing value. The government is now to stop that rot by re-linking the value of the pension to earnings, which should help maintain its buying power by keeping it ahead of inflation.

It's a measure expected to cost around 2bn per year - hence the need to take more NI contributions from those of us working for longer.

However, will we be able to work for longer? When the time comes, will we be fit and happy to work into our late 60s?

Many of us had better be. There are various estimates indicating that large numbers of us are sailing towards this ever-receding retirement horizon with no safety net in place.

Halifax says that 52% of us is not saving into a pension. Barings reckons it's 40% of women, and a third of men.

The Prudential reckons that 27% of people retiring over the next decade will be largely dependent on the State Pension, meaning that they have no significant private pension or savings in place.

What are we talking about, when we talk about depending on the Basic State Pension? Many people are surprised to hear that it is under 100 a week. In fact, for a single person it's just 97.65, or around 5,000 a year. Compare that to what you are used to living on today.

The government's own figures show that the UK State Pension is just 30% of the national average wage, well below the EU average of 60%.

A recent paper published by the EU said that, taking the definition of poverty as living on less than 60% of the national average wage, a third of UK pensioners are paupers, based on their pension and private savings.

Furthermore, due to better health and longer lives, we are now facing longer retirements than our parents and grandparents did. The major insurance companies tell us that, of 100 men who live to 65, 39 will live to be 90.

The answer, as they say in the States, is a 'no-brainer'. We need to be doing some pension planning now, if we want to be able to buy food, have a car, and buy birthday presents for our grandchildren, in 25 years' time.