Millennials expect 36 per cent of their retirement income to be made up by the state pension, potentially exposing themselves to a £75,000 shortfall, research by Portafina has shown.

The survey showed that on average, Millennials expected to need an income of £35,648 a year to live comfortably in retirement.

Whilst this is broadly in line with the Pensions and Lifetime Savings Association's (PLSA) retirement living standards, Portafina emphasised that the reliance on the state pension could be unrealistic.

The firm highlighted that the state pension would have to rise to at least £12,833 a year in retirement to meet younger expectations, adding that the current full state pension would cover just 25 per cent of Millennials expected annual retirement income.

Assuming a current full state pension of £9,110 per annum, this could leave savers with a £75,000 short over a 20-year period.

This also follows recent caseload figures from the Department for Work and Pensions (DWP) which showed that less than half (44 per cent) of new pensioners are receiving the full state pension.

Echoing this concern, Portafina added: "With nearly a third of 25-34-year olds not expecting to receive the full state pension amount, this shortfall could be even greater."

Furthermore, recent research by The Investing and Savings Alliance (Tisa) showed that lifetime renters are expected to exhaust their pension savings 12 years before homeowners.

The Tisa report highlighted that research from the Resolution Foundation estimated that 16 per cent of millennials are expected to be lifelong renters, and emphasised the "scale of the challenge facing future generations" in securing sufficient retirement income.

Portafina have urged savers to engage with their pension at a younger age, estimating that delaying pension contributions until later life could increase a potential pension shortfall by over £158,000.

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