Retirement and Pensions in Spain..

Expats:Pension-Retirement

If you plan to settle in Spain after retirement, you’ll need to consider your pensions, tax, life assurance, investments and healthcare arrangements in your new home. A UK national, a Dane, a Swede or Norwegian has the right to live in Spain by virtue of their countries’ membership of the European Economic Area. If you are moving permanently to Spain, you can continue to receive your UK state pension and also get yearly increases in your pension.

Before you leave the UK, calculate your retirement income by obtaining and completing a form BR19 from the Retirement Pension Forecasting and Advice Unit for a state pension forecast. You can get this estimate four months before you reach the UK pension age. The forecast you receive will tell you what your pension is at the date received and whether or not you will get more by the time you reach UK pension age.

You should write to the UK Pensions Service to inform them that you are moving to Spain and give them your new address. To check on your pension rights in Spain you should look at www.ukinspain.com/english/ - the website of the British Embassy in Madrid, which contains a good deal of information useful to those relocating to Spain from the UK because the state pension age and entitlements may vary between Spain and the UK.

To obtain your UK state pension in Spain you will need to complete a claim form from the Pensions Service. This is also normally available four months before you reach the UK pension age. It asks you if you want to claim a UK retirement pension and for details of any periods of residence and state insurance you have in other countries. If you are living in Spain and claim a pension from that country, the UK Pension Service will pass details of your claim to the Spanish authorities to process your pension in Spain.

Before you retire to Spain you should seek independent tax advice about any benefits to you of offshore banking as this could reduce your tax liability. Your country of residence will affect your liability to pay tax on income over the UK personal allowance.

You should inform your local social security office, the Inland Revenue National Insurance Contributions Office (International Services) and the Department for Work and Pensions when you move and provide your contact details in Spain.

Personal and company pension schemes can usually be paid anywhere. However, some company schemes pay a pension only to a UK bank. Further, some annuity companies levy charges for each overseas payment, although others do so for free.

You may consider transferring your pension fund abroad. This would eliminate the euro/sterling exchange rate risk if your funds were maintained in euros. However, all such international transfers must receive the prior approval of the Inland Revenue. So you should seek specialist advice from a pensions expert. The Department for Work and Pensions will be able to advise on your rights in Spain.

Gazelle - www.spaingolfproperty.co.uk