Should I transfer my UK pension (QROPS) before moving?

Rarely worth it for EU moves post-Brexit. UK pensions can be drawn from abroad cleanly under the DTA. QROPS adds cost, complexity, and lifetime allowance issues. Get specialist UK + Spanish advice before transferring.

Does Spain tax US Social Security?

For US citizens: SS is US-taxable only. For non-citizens resident in Spain: SS is Spanish-taxable. Check your citizenship status before assuming.

Financial

Retirement Planning in Spain

Retiring in Spain — whether on a Spanish pension, a UK/EU/US pension, or self-funded — means understanding the Spanish public system, the tax-deferred private wrappers (Plan de Pensiones, PPSE, PIAS), and how foreign pensions are taxed once you become a Spanish tax resident.

Last updated 1 June 2026

Spanish public pension (2026)

✦Full pension: 36.5 years of contributions (rising to 37 by 2027), retirement age 66y 6m (66y 8m by 2027).
✦Max contributory pension: €3,267/month × 14 payments = €45,738/year gross.
✦Average pension: €1,442/month — well below the EU-15 average.
✦Early retirement (-2 yrs): pension reduced by 21% (voluntary) or 6–8%/yr (involuntary).
✦Sustainability factor + Intergenerational Equity Mechanism (MEI) gradually reduce real benefits 2025–2050.

Tax wrappers compared

Wrapper	Annual contribution cap	Tax benefit	Withdrawal taxation	Best for
Plan de Pensiones individual	€1,500	Income-tax deductible	Taxed as work income	Marginal rate >37%
Plan de Pensiones empleo	€8,500	Employer + employee	Taxed as work income	Self-employed, SLs
PIAS	€8,000 (€240k lifetime)	None on entry	Annuity = ~85% tax-exempt	10+ year horizon
SIALP	€5,000	None on entry	100% tax-free if held 5 yrs	Tax-free growth
Standard brokerage	Unlimited	None	19–28% savings scale	Flexibility

Foreign pensions in Spain

UK state and private pensions: taxable in Spain (not UK) once you're Spanish-resident, under the UK-Spain DTA. UK Crown pensions stay UK-taxed.

US Social Security and IRA/401k: US has primary taxing rights on SS for US citizens; Spain taxes IRA/401k drawdowns. Foreign Tax Credit prevents double taxation.

Lump-sum withdrawals from foreign pensions are usually fully taxed as Spanish income — phasing withdrawals across years can dramatically lower the marginal rate.

The 4% rule in Spain

After Spanish savings tax (19–28%), a 4% withdrawal rate gives roughly 2.9–3.2% net spending. Plan accordingly: €1M portfolio = ~€30k/yr after-tax sustainable spending, not €40k.

Move to Spain — retire

Visas, healthcare, residency.

Taxes

Full residency-tax framework.

Bonds

Drawdown income ladders.

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