The fall in average property prices should force a dramatic reappraisal of pension plans, according to research from Friends Provident.
Both Halifax and Nationwide are now reporting house prices have fallen by more than six per cent over the last year but with a third of consumers depending on property for their retirement, this could pose problems.
In response Friends Provident is urging people to think beyond property when it comes to their financial futures.
"If house prices continue to fall, people could find themselves in serious financial difficulty with negative equity on their property and no personal pension," said Jeremy Ward, head of pensions marketing at Friends Provident.
"This is a dangerous situation to be in if people don't have any savings or a pension to purchase an annuity for their 'winter' years."
Calculations from Friends Provident show if house prices fell to the level of the last property slump in 1992, the average homeowner could be left with a negative equity of -£89,850 based on figures from the Council of Mortgage Lenders (CML).
This is based on the current average mortgage is £129,000 at 80 per cent loan-to-value (LTV).
With research from the life and pensions firm finding two thirds (65 per cent) of UK consumers haven't started saving for their retirement - it is now warning them to avoid sole reliance on property.
"Our research shows a potential crisis for some people in the future," said Mr Ward.
"People have depended on the property market in the past to fund their retirement, but with the uncertainty over the past few months and the current credit crisis they should not put all their eggs in one basket."