How to maximise your UK pension when living in Spain

If you are planning a permanent move to Spain, it is worth considering how you will manage and maximise your pension income. One of the ways to do this, under the right circumstances, is as a Qualifying Recognised Overseas Pension Scheme (QROPS) or Self-Invested Personal Pension (SIPP). These types of schemes can provide greater control over your pension income and could even potentially lower tax bills.

Self-Invested Personal Pensions (SIPPs)

This is a pension scheme approved by the UK Government and offers the opportunity to invest your pension into a variety of investments (with applicable tax charges), such as:

• Overseas property investments – residential or commercial properties
• Ground rents
• Moveable property with less than £6,000 market value
• Stocks, shares futures and options (these must be on an exchange recognised by the UK Government and scheme provider)
• Investment trusts (must be Financial Conduct Authority (FCA) authorised and regulated)
• Authorised UK unit trusts
• Unlisted shares
• Gold bullion or other assets, such as works of art, antiques, fine wine, or vintage cars

You may benefit from moving your pension into an approved scheme, such as a QROPS or SIPP, if you are a UK pensioner moving to Spain permanently.

Qualifying Recognised Overseas Pension Schemes (QROPS)

QROPS are overseas pension schemes with specific Her Majesty’s Revenue and Customs (HMRC) requirements and criteria. It is possible to transfer a UK Pension into the scheme without paying any additional charges.

You need to ensure you continue to make the best of your pension after your move to Spain

QROPS have certain tax advantages and are often popular with UK expats overseas. They can also be transferred upon death to a chosen beneficiary.

These can be complex investments, so it is important to seek the advice of a fully qualified Independent Financial Advisor (IFA)

We can put you in touch with an authorised tax and financial advisory firm, who could advise you on financial planning and taxation when you move to Spain or own property there or why not call the Resource Team on 020 7898 0549?

If you continue to withdraw from your existing pension, it is important to look into using a currency exchange specialist who can make the best of your transfers.

Transfer your existing UK pension to Spain

If you know you will be relying on any UK pension for your income in Spain, be aware that the amount you receive with each payment can change according to the exchange rate. If sterling weakens against the euro, you will not receive as much as you may expect. We recommend talking to our trusted currency partners, Smart Currency Exchange can help you to plan ahead, stay on top of the markets and be able to budget more effectively.