Can I transfer my UK pension to Spain?
If you want to retire in Spain, transferring your UK pension should be a priority. We reveal how the process works, the benefits and risks, as well as other financial considerations.
Around 300,000 UK expats live in Spain, making it one of the most popular places for Brits to spend their golden years.
If you’re thinking of retiring in Spain, you’ll need to know how to transfer your UK pension. We explore what to expect when transferring your pension.
What is an international SIPP?
Despite the name, an international Self Invested Personal Pension (SIPP) is actually registered in the UK, and it’s regulated by the Financial Conduct Authority. It operates under the same rules as a standard UK SIPP, but it has features that are designed for expats.
Many older guides suggest transferring to a QROPS, but this is no longer available for most people. And there’s also a tax trap here, because transferring to a QROPS outside Spain could trigger a 25% Overseas Transfer Charge.
Instead, you could consider either leaving your pension in a standard UK scheme or transferring to an international SIPP. Watch out, though, because you could lose the 25% tax-free lump sum once you move to Spain.
Always seek independent cross-border advice if you’re planning to move abroad to help you navigate any tax complexities, as well as financial decisions about your pension.
Here are some of the typical features of an international SIPP.
| Feature | Detail |
|---|---|
| UK Regulation | Regulated by the FCA in the same way as a regular SIPP |
| Admin | Ability to make payments to a non-UK account and use non-UK addresses for registration |
| Tax | Offer the ability to draw down income free from UK tax, which could provide benefits, depending on your residency and tax position |
| Currency flexibility | Allow you to hold investments and make payments in other currencies |
| Investment choice | Like a standard SIPP, they offer a wide range of investment choices |
What is a QROPS?
A Qualifying Recognised Overseas Pension Scheme (QROPS) allows UK expats to transfer their pensions overseas.
However, all QROPS must appear on HMRC’s list of approved schemes and as of November 2025, there were no QROPS available to the general public.
While there are QROPS available outside of Spain, since October 2024, these attract a hefty 25% tax penalty for international transfers.
If you choose a scheme that’s not listed, your UK provider may refuse to make the transfer, and you might face substantial tax penalties.
However, there are other options, including an international self-invested personal pension (SIPP), which is still regulated in the UK and may have lower charges.
From 6 April 2024, any amount transferred to a QROPS will be tested against the overseas transfer allowance (OTA), which is set at £1,073,100 (or a higher protected amount, if applicable).
If the transfer exceeds this allowance, a 25% overseas transfer charge may apply to the excess amount.
So, it’s wise to seek FCA-regulated financial advice from someone specialising in overseas tax before transferring your pension.
What are the rules for transferring your pension to Spain?
There are various rules you need to comply with in order to transfer your pension. Government form APSS 263 provides information on what you need to know before making a transfer.
You’ll need to download the form and send it to your UK pension provider.
HMRC will levy a 25% tax charge if you don’t provide all the information within 60 days of requesting the transfer.
What are the benefits of transferring your pension to Spain?
Although QROPS are currently not typically available in Spain, it’s helpful to understand why they were once popular.
A QROPS lets you invest your fund and take income in the currency of your choice. In contrast, if you retire abroad on a sterling-based pension, you expose your funds to currency fluctuations.
A QROPS gives you access to investments from across the world, so you can create a personalised portfolio.
If you live abroad, you should get advice on tax rules on inheriting a pension. The tax rules are complicated and depend on your circumstances.
It’s worth getting independent financial advice to help prepare for this.
What are the disadvantages of transferring your UK pension to Spain?
While there are benefits to transferring your UK pension to Spain, there may also be disadvantages for anyone taking their pension out of the UK.
You relinquish any guaranteed retirement and death benefits attached to a defined benefit (DB) pension.
You will lose the protection given by the UK Pension Protection Fund to DB schemes.
You take on the running costs paid by your existing DB scheme.
You might have to pay higher fees than those levied by a defined contribution (DC) scheme.
While you can access more investments via a QROPS, you are exposed to greater risk.
You may have to pay additional tax charges if you make a withdrawal from a QROPS and return to live in the UK within 10 years.
It’s a good idea to get guidance from an independent financial adviser before transferring your pension.
Can I still get my state pension?
You are still entitled to your UK state pension if you retire in Spain, provided you have made sufficient national insurance contributions and are of retirement age.
As the country is in the European Economic Area (EEA), it will increase in line with any rises in the UK.
How do you transfer your pension to Spain?
Historically, many expats used QROPS to transfer their pension to Spain.
However, this option is no longer available in practice as there are no QROPS schemes available to the general public.
The following information explains how this process works in theory, but it’s currently unavailable to most expats.
To transfer your UK pension into a Spanish QROPS, follow these steps (although it is wise to get financial advice first).
Research if you are eligible
Ensure that your pension meets the criteria for a QROPS and that the Spanish QROPS is a registered scheme that meets HMRC’s criteria.
Select your QROPS provider
Make sure you find a reputable provider and consider pension fees and investment options when making your choice.
Tell your UK pension provider
You must let your UK pension provider know that you are moving to Spain and want to transfer your pension to a QROPS. They will then send you all the necessary paperwork for you to complete.
Complete and submit the transfer forms
You should complete the transfer forms sent by your UK pension provider and QROPS provider in Spain.
Make sure everything is accurate and include any supporting information that’s requested.
Then submit the completed forms to both providers. Your UK provider will transfer your pension to the QROPS in Spain, subject to approval by HMRC.
What other financial issues should you consider when moving to Spain?
Transferring your pension isn’t the only thing you need to sort before retiring to Spain.
Here is a summary of what to consider.
Your new property: How will you finance your new home – with a mortgage, from savings or through the sale of your UK property? If you’re taking out a mortgage, contact a broker to work out exactly how much you can borrow, so you’ll be ready to buy your new home.
Address your tax affairs: HMRC must be informed about any changes in your circumstances. A financial adviser can help you notify HMRC, clarify tax liabilities and advise you on making the most of your pension.
Inheritance: As soon as you own a new home, you must write a new will in Spain.
Buy insurance: Find a reputable insurance provider to make sure your property and any vehicles are covered and consider private medical insurance.
Open a Spanish bank account: It’s a good idea to open a Spanish bank account, so you can transfer funds before you move. Make sure you have several forms of ID ready.
You’ll also need a healthy contingency fund to pay for flights, hotels and car hire, so you can afford to do house viewings in person.
If you follow the transfer process and get professional advice, transferring your UK pension to Spain shouldn’t be too tricky.
While tax rates in Spain aren’t especially low, the cost of living is significantly lower than in the UK.
With your income properly secured in an approved QROPS, you should be able to enjoy your retirement.
Get expert financial advice
Planning your retirement once you move to Spain can be a complex process with important tax implications and financial considerations.
However, with the right planning and professional advice, you can navigate these challenges, secure your retirement income, and make the most of your new life in Spain.
Consider the benefits and risks carefully to ensure your financial future is well protected as you enjoy your retirement in the sun.
Unbiased can match you with a financial adviser for expert financial advice on transferring your UK pension to Spain, managing tax implications, and optimising your retirement income to suit your new life abroad.
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