If you move from the UK to Spain, your UK State Pension keeps paying, keeps rising each year under the triple lock, and can be sent straight to a Spanish bank account. What changes is the tax. Once you spend more than 183 days a year in Spain you become a Spanish tax resident, and Spain then taxes most UK pension income under the UK-Spain Double Taxation Convention. Government service pensions and the timing of any tax-free lump sum are the two things that catch people out, and both are worth sorting before you go.
Your Pension Still Pays, and Still Rises
You need at least 10 qualifying years of National Insurance to receive any new State Pension, and 35 for the full amount. Anything between gets you a proportional share.1GOV.UK. The New State Pension From April 2026 the full new State Pension is £241.30 per week, following a 4.8 per cent triple lock increase.2House of Commons Library. Benefits Uprating 2026/27
Living in Spain does not freeze your pension. Annual increases continue for anyone living in the European Economic Area, Switzerland, or a country with a relevant social security agreement with the UK.3GOV.UK. State Pension if You Retire Abroad Spain sits inside the EEA, so the triple lock applies exactly as it would at home. The legal protection comes from the EU-UK Withdrawal Agreement for people already living in an EU country by 31 December 2020, and from the EU-UK Trade and Cooperation Agreement for anyone who moved afterwards.4House of Commons Library. Frozen Overseas Pensions
Claiming or Redirecting Payments From Spain
You can start a claim up to four months before you reach State Pension age. From Spain, that means contacting the International Pension Centre by phone or sending the international claim form by post, and supplying the IBAN and BIC for the account you want paid.3GOV.UK. State Pension if You Retire Abroad If you are already drawing the pension when you move, you tell the International Pension Centre about the new address and bank details the same way.5GOV.UK. International Pension Centre Allow several weeks for the change to feed through to your first payment in Spain.
Some providers periodically send a life certificate that needs a witness signature from a doctor, lawyer, or notary. Miss one and payments can freeze until you return it, so watch your post.
Where Your Pension Is Taxed After You Move
You become a Spanish tax resident when you spend more than 183 days in Spain during a calendar year. Occasional trips out count as time in Spain unless you can prove you are tax resident somewhere else, and whether you hold a formal residency permit makes no difference to the 183-day test.6Agencia Tributaria. Individual Resident in Spain
Once you are a Spanish tax resident, the UK-Spain Double Taxation Convention decides who taxes what.7Legislation.gov.uk. The Double Taxation Relief and International Tax Enforcement (Spain) Order 2013 Under Article 17, private pensions and the UK State Pension are taxable only in the country where you live. So Spain taxes them, and the UK does not.8GOV.UK. Convention Between the United Kingdom and the Kingdom of Spain for the Avoidance of Double Taxation
The Government Service Pension Exception
Government service pensions work the other way round. Under Article 18(2), a pension earned through the Civil Service, local government, the police, the NHS in its capacity as a government body, or similar public-sector employment stays taxable in the UK. The rule flips only if you are both a resident and a national of Spain, and most British retirees are not Spanish nationals, so their government service pension continues to be taxed by HMRC.8GOV.UK. Convention Between the United Kingdom and the Kingdom of Spain for the Avoidance of Double Taxation
You still declare the pension on your Spanish tax return. Spain uses it to work out the rate that applies to your other income and applies foreign tax credits for what you paid in the UK. Misclassifying a government service pension as an ordinary private pension is one of the most expensive mistakes retirees make in Spain, because it can produce double taxation that takes months to unwind.
The Lump Sum Timing Trap
The 25 per cent tax-free lump sum from a UK pension is a familiar feature of UK retirement planning. Spain does not recognise its tax-free status. Take the lump sum after becoming a Spanish tax resident and Spain treats the whole amount as taxable. Because it is treated as a capital gain rather than pension income, it falls under Spain’s savings tax rates, which run from 19 per cent on the first €6,000 up to 30 per cent on amounts above €300,000.
Timing therefore matters enormously. If you take the lump sum before you cross the 183-day threshold in a Spanish calendar year, UK rules apply and it stays tax-free. Once you are Spanish resident, the entire amount is taxable. Anyone planning the move with a lump sum still to draw should get cross-border tax advice before withdrawing anything.
What Spanish Tax Will Actually Cost You
Regular pension payments count as general income and go through Spain’s progressive scale. The 2025 rates are:
- Up to €12,450: 19 per cent
- €12,450 to €20,200: 24 per cent
- €20,200 to €35,200: 30 per cent
- €35,200 to €60,000: 37 per cent
- €60,000 to €300,000: 45 per cent
- Above €300,000: 47 per cent
Savings income, including lump-sum withdrawals and investment returns, is taxed separately:
- Up to €6,000: 19 per cent
- €6,000 to €50,000: 21 per cent
- €50,000 to €200,000: 23 per cent
- €200,000 to €300,000: 27 per cent
- Above €300,000: 30 per cent
The personal tax-free allowance is €5,550 a year, rising to €6,700 once you turn 65 and €8,100 from 75.9Agencia Tributaria. Tax-Free Threshold Amounts These allowances are modest compared with the UK personal allowance, which is a common reason retirees find their overall tax bill in Spain higher than it was at home.
Filing the Annual Return
Spanish tax residents report worldwide income each year on the Modelo 100 personal income tax return.10Agencia Tributaria. Form 100 – Personal Income Tax – Annual Return The filing window typically runs from early April to the end of June for the previous tax year, and you submit through the Agencia Tributaria’s online platform using a digital certificate or Cl@ve PIN. UK pension income, investment returns, rental income, and everything else earned worldwide goes on the return. Any UK tax already paid on a government service pension is declared so Spain can apply foreign tax credits and work out the correct rate on your other income.
Late filing brings automatic surcharges: 1 per cent of the amount owed, plus an extra 1 per cent for each full month you are late. After 12 months the surcharge jumps to 15 per cent plus late-payment interest running from that point.11Agencia Tributaria. Applicable Surcharges Filing voluntarily before the tax office contacts you cuts the surcharge by 25 per cent. Many retirees use a gestor administrativo, at typical fees of €50 to €150 for a straightforward return, which given the interaction between UK-source income, treaty credits, and the progressive rate structure tends to pay for itself.
Reporting the UK Pension Pot: Modelo 720
If you leave a UK pension pot invested rather than drawing it down, or if you keep UK bank accounts and property, Spain wants to know. Spanish tax residents must declare foreign assets on the Modelo 720 informative return when the total value in any of three categories exceeds €50,000. Those categories are bank accounts held outside Spain, securities and investment funds held outside Spain, and real estate outside Spain.12Agencia Tributaria. Form 720 – Informative Tax Return – Declaration on Assets and Rights Located Abroad
The filing window runs from 1 January to 31 March. After the first declaration you only need to file again if a category has grown by more than €20,000 since the last submission.
The penalty regime was reformed after the European Court of Justice ruled in January 2022 that Spain’s original fines were disproportionate. The fixed fine is now €20 per piece of undeclared data, with a minimum of €300 and a maximum of €20,000 per category, halved if you file late but before the tax office formally notifies you. Penalties double for assets held outside the EU, and a four-year statute of limitations now applies.
Healthcare Once You Are Drawing the Pension
Drawing a UK State Pension unlocks the S1 form, which entitles you to use the Spanish public health system with the cost picked up by the UK. You register the S1 at your local Instituto Nacional de la Seguridad Social office, and from that point you use the public system on the same basis as a Spanish insured resident.13GOV.UK. Healthcare for UK Nationals Living in Spain Dependent family members, including a spouse and dependent children, are usually covered under the same entitlement, and the form is requested through NHS Overseas Healthcare Services.14NHS. Planning Your Healthcare When Living Abroad
Without an S1 you would need to either pay into the Spanish Convenio Especial scheme or take out private cover, which for a retired expat commonly runs from around €700 to over €4,000 a year depending on age and pre-existing conditions.
Currency: What Sterling-to-Euro Conversion Does to the Payment
The State Pension is calculated in pounds. Have it paid straight to a Spanish account and your provider converts it to euros at the prevailing rate on each payment date. Over a long retirement, small currency movements add up: a one or two per cent shift in GBP/EUR across a year feeds directly into spending power.
You have options. You can have the pension paid to a UK account and transfer money to Spain yourself, which lets you choose when to convert and use specialist currency services that often beat bank rates. Some retirees use forward contracts to lock in a rate for up to two years, which helps with budgeting. The alternative is to accept whatever rate the banking system applies to each pension payment. Neither approach removes currency risk, but actively managing transfers tends to produce better results than leaving it to default bank conversions.
Topping Up Before You Go: Voluntary Contributions
If your National Insurance record has gaps, filling them before or after the move can noticeably increase what Spain then pays you across in euros. Voluntary Class 3 contributions cost £17.75 per week for the 2025-26 tax year, roughly £923 for a full year.15GOV.UK. Voluntary National Insurance – Rates You generally need to have previously lived or worked in the UK to be eligible, and you apply through HMRC using form CF83.16GOV.UK. Apply to Pay Voluntary National Insurance Contributions When Abroad
You can usually pay for gaps in the current tax year and the previous two years at the original rate for those years, with anything further back charged at the current rate. Before paying, check your State Pension forecast on GOV.UK to see how much each extra year would actually add. Some years produce a big uplift, others barely move the figure, and a quick check saves money on contributions that would not change the outcome.