It can sometimes be a bit confusing to understand the different stipulations regarding pension types and qualifications for the UK citizen living abroad. So, let us take a brief look at some of the most commonly asked questions and briefly address each one.
Can I Get a Pension in Spain?
The simple answer here is yes. However, there are a few factors to consider which do not only include age, but also the present Spanish laws governing their pension schemes as well as the possibility to transfer an existing UK pension over to Spain.
Do I Get a Spanish Pension if I Work in Spain?
If you are a UK citizen who has become a resident of Spain and is legally working, a pension can be collected after a minimum of 15 working years have been accrued. Please keep in mind that one will obviously have to reach the necessary pension age before collecting. While at present this 15 years is still applicable, over the next 10 years the time period necessary will gradually be increased to a total number of working years to the last 25 years.
How Many Years Must I Pay Into a Spanish Pension in Order to Qualify?
This is perhaps the most complicated of questions, as some laws have recently been modified. The primary reason for this discrepancy is due to the fact that Spain is raising the pension age from 65 to 67 years. The increase will be incremental and will end in 2027 when full retirement age will generally be 67 years. Thus, the time allotted to qualify for a pension has been slightly altered. Clarification in this matter will help.
To begin with, for the first 15 years of the contribution period pensioners will receive 50% of their full pension. Starting on the 16th year, each month 0.19% of the original base pension will be added. This will last for a period of almost 21 years. After this and for the remaining 15 months, 0.18% is added. To simplify things a bit, the first 15 years a pensioner will receive 50% pension. It will take another 22 years to reach the full amount as opposed to the 20 years previously (again, this is due to the raising of the retirement age by 2 years). After a total of 38 years and 6 months, 100% pension will be reached.
So in 2017, you may retire with a full pension if you have reached the age of 65 and have contributed for a minimum of 36 years and 3 months. If you have contributed less than this, your retirement age will be 65 years and 5 months.
By 2027, you can retire with a full pension if you have reached the age of 65 and have contributed for more than 38 years and 6 months, else your retirement age will be 67 years.
You can see a table with all of the current age and contribution requirements for a Spanish pension listed at the following page from the Seguridad Social website.
Can I Get my UK Pension in Spain?
Those who decide to move to Spain and have reached the current UK pension age of 65 years have the ability to claim a UK pension. A UK citizen first needs to contact the International Pensions Centre by phone or at https://www.gov.uk/international-pension-centre. They can then either request or download a form known as the IPCBR1. There is another option for those who may not have reached pensioner age but are still curious to calculate what their UK pension scheme will be in the future. Another form can be found from this website that will give an accurate forecast regarding what amounts one can expect to receive upon reaching UK retirement age.
Please keep in mind that although Spain is increasing its retirement age to 67, the current UK age is still 65 although it will rise to 66 by 2026 and 67 by 2028 for both men and women. Finally, remember that if you are working in the UK and have been paying into a pension and plan on relocating to Spain, the pension can be transferred. Alternatively, if you have reached retirement age, you can receive your UK pension directly as well.
These are some of the major points that many will ask when contemplating relocating to Spain. As with any profound financial decision, it is always best to enquire within the most relevant office such as the International Pension Centre for UK pension questions or a local Spanish employment office INSS for enquiries related to Spanish pension plans.
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Image courtesy of The Daily Mirror.