Complete Guide to Retirement in Spain

If you’re approaching retirement age then you may be thinking about what you want from your retirement. Whilst many people imagine retiring in their current homes and pottering in the garden, many more dream of retiring to a home in the sun, and the kind of relaxed, laidback lifestyle that you can only find in Spain. Some 310,000 Britons are officially registered as living in Spain, which makes it the country with the highest number of Britons living abroad in Europe.


So if Spain is your dream then you’re in good company! And there’s so much to like: affordable property, year-round sunshine, and low living costs.

Here is our complete guide to retirement in Spain, to help you decide if it’s the right choice for you:

Guide to Accessing Your Pension

One of the main concerns for pensioners considering moving abroad is how it will affect their income. The good news is, it is easy and relatively straightforward to access your pension when you move to Spain. Retirees living in Spain who are entitled to receive a UK state pension are able to either have this paid into their UK bank account or into a bank account in Spain. If you wish to receive your UK state pension into a Spanish bank account you’ll need the international bank account number (IBAN) and bank identification code (BIC) numbers for your Spanish account and the process will be straightforward. However, it’s important to note that you will have no control over the exchange rate used for the transfer into your Spanish bank account if you choose to access your pension this way, which might not always be favourable.

For this reason, many pensioners prefer to have their funds paid into their existing bank account in Sterling and then use a currency transfer specialist to send euros to their Spanish account, enabling them to work harder to ensure that they receive every penny that they’re entitled to, without losing anything in the exchange process.

If you have a personal or workplace pension as well as your State pension then it is advisable to speak to a financial advisor before you leave the UK; each pension provider will have different rules on accessing your pension abroad, meaning there are too many variables to detail here. There is no ‘one size fits all’ solution, so securing some professional advice would be wise.

Guide to The Cost of Living

The costs of living are much lower in Spain than there are in many other European countries: great news! But you should still consider the costs that you will incur if you decide to move, and that what you have to spend each month may fluctuate if you’re transferring your income from sterling to euros.
The first area of saving you might notice is on your council tax. Spanish council tax is paid directly to your local town hall and the rate you pay will vary by area and region, but you can expect to pay around a quarter of what you will pay for a property of a comparative size in the UK. In terms of utilities, you should expect to pay around the same as you would in the UK, whilst having an air conditioning unit in your home may also bump up your expenses. Having a swimming pool will add to your monthly bills too, whilst the costs of public transport, groceries, and eating and drinking out are all much lower meaning that your quality of ife can ultimately be better on a lesser budget.

Guide to Spanish Healthcare

One of the reasons why Spain is such an appealing retirement destination for Brits is because of its healthcare system. If you are in receipt of a state pension from the UK then you are entitled to the same level of state sponsored healthcare in Spain. This is because both countries are members of the European Economic Area (EEA), although how this will be impacted by the UK’s decision to leave the EU has yet to be fully qualified.

Applying for your eligibility certifacte can begin before you even leave the UK. Simply apply for an S1 form from the International Pension Centre. You can then register this form at your local Social Security office (Instituto Nacional de la Seguridad Social) along with your your passport, NIE and certificates of local and national residency when you arrive in Spain. You’ll then be issued with a health card.

An added bonus of this process is that, when you’re in the UK, you’ll still be eligible to receive NHS healthcare for free, just like an ordinary UK resident.

Guide to Wills and Inheritance

Retirement is a key life stage that should inspire you to ensure that all of the necessary legal structures are in place to protect your assets, for both you and for your family, for the rest of your life. Before you move to Spain you should have a will in place, and outline clearly what you would like to happen to your assets after your death. You should also secure a bi-lingual lawyer once you move to Spain and you may need to have a Spanish will written up too.

The rules governing succession law for expats can be complex, taking into factors such as domicile, residence, nationality or habitual residence, in order to determine what laws should apply to an individual’s estate. Put simply, if you pass away whilst you live in Spain then you should it isn’t always simple to ensure that your property and your other assets go where you want them to go.

The Eu have attempted to simplify this process by introducing a new Succession Regulation. This regulation will impact on any British person who owns property in Spain, and means that the default position for succession is governed by the law of the country in which the deceased was ‘habitually resident’. So for a British retiree living in Spain, this would be Spain. For this reason, it is important to ensure that your will is compliant with Spanish laws, and that you comply with Spanish inheritance tax laws too.

Guide to Taxes and Paperwork

If you spend more than 183 days a year in Spain then you should register as a tax resident in the country, and you will need a Spanish tax identification number, known as an NIE, which you also need to purchase a property. As a rule, once you are tax resident in Spain, you are liable to pay income tax there on your worldwide income, which includes your UK state and any private pensions, as well as interest or gains earned on deposit accounts and investments in the UK or offshore. If you’re not sure whether or not this will apply to you then the International Pension Centre can help, and is certainly a great place to start. If you have considerable impendent means, it is worth noting that Spain also has a wealth tax, which is designed specifically for residents who hold significant worldwide wealth. This generally doesn’t affect the majority of British expats.

Because tax law in Spain can be just as complicated as tax law in the UK, we would advise that you secure the services of a bilingual accountant, who would be best place to help you ensure that you’re paying everything you’re responsible for without paying too much.

Decided that retiring to Spain is the right choice for you? Our expert property specialists are perfectly positioned to help you find the Spanish home of your dreams. Why not get in touch today to see what they can do for you.