UK State Pension if you retire to Spain

Will your State Pension keep rising in Spain?

GOV.UK states that your State Pension will only increase each year if you live in:

• the European Economic Area (EEA), which includes Spain;
• Gibraltar;
• Switzerland;
• countries that have a social security agreement with the UK, although you cannot get increases in Canada or New Zealand.

If you live outside those countries you will not get yearly increases, and your pension goes up to the current rate if you return to live in the UK. That is why the same pension can be worth very different amounts in Spain and, say, Australia over twenty years.

Claiming and being paid from Spain

Per GOV.UK, you can claim the State Pension abroad if you have paid enough National Insurance contributions to qualify.

• You must be within four months of your State Pension age to claim.
• You can claim by contacting the International Pension Centre or by sending its international claim form.
• If you split your year, you must choose one country for payment. You cannot be paid in two countries in one year.
• The pension can be paid into a bank in the country you live in, or into a UK bank or building society.
• Payments are usually made every four or thirteen weeks.

If you are paid into a Spanish account, the amount is converted into euros at the exchange rate at the time, and GOV.UK says there is a conversion charge of 0.39% before payment. If you stay in a UK account, the exchange rate and fees are set by your bank or transfer provider instead.

Check your State Pension age first

Many people reading this will retire to Spain before they reach State Pension age. In that case your pension and the S1 healthcare route do not start until you reach it. Use GOV.UK’s State Pension age checker and the State Pension forecast to see your date and amount.

If you have gaps in your National Insurance record, GOV.UK also points to voluntary contributions as a way to fill them. That is worth checking before you leave the UK.

How the State Pension is taxed

GOV.UK says how much tax you pay and where depends on where you are considered a resident. If you are an overseas resident you may be taxed by both the UK and the country where you live, and if the two countries have a double taxation agreement you will normally only pay once.

The UK and Spain have such an agreement. Tax advisers generally treat UK State Pensions and private pensions of a Spanish tax resident as taxable only in Spain, while UK government service pensions (such as civil service or local authority schemes) are generally taxable only in the UK. The Spanish tax agency’s own summary says private-sector pensions are taxed only in Spain and government pensions generally only in the UK. See our tax guide for how that fits together, and speak to a qualified adviser about your case.

Tell the right people

GOV.UK advises contacting the International Pension Centre if you have already retired and are thinking of moving abroad, to check how your pension might be affected. Do this before you move, and report changes in your circumstances afterwards.

Common questions