UK Pension Options for Residents in Spain
What You Need to Know
If you are a British expat living in Spain, your UK pension remains one of your most important financial assets. Post-Brexit rules, Spanish tax treatment, and UK legislative changes mean you need to understand your options carefully. In general, you have three main choices.
Retain your UK Pension Scheme
You can keep your UK pension where it is, but this comes with challenges:
Access limitations
Many UK schemes restrict payments to non-UK bank accounts or will only pay in GBP. This creates currency risk if your expenses are in euros.
Annuities
If your scheme requires annuitisation, many UK annuity providers refuse to pay directly into Spanish bank accounts. You may need a UK bank account or face less favourable payment terms.
Inheritance Tax (IHT)
From April 2027, UK pensions will fall under UK IHT even if you are non-resident, reducing their estate-planning value.
Transfer to a QROPS
A Qualifying Recognised Overseas Pension Scheme (QROPS) can be based in Gibraltar or Malta for Spanish residents. Benefits include:
- No UK IHT – Assets are outside UK pension jurisdiction, which can protect against UK IHT.
- Currency flexibility – Income can be paid in euros, reducing FX risk.
- Wider investment choices – Often broader than UK workplace schemes.
Caution: Since the 2024 Autumn Budget, a 25% Overseas Transfer Charge (OTC) applies if your QROPS is not in your country of residence. If you move away from Spain within 5 years, the OTC can still apply.

Transfer to a SIPP
Self-Invested Personal Pensions (SIPPs) are often the most cost-effective option:
Regulated by the FCA
Provides strong investor protection.
Flexibility
You can take income through flexible drawdown from age 55.
Multi-currency accounts
Many International SIPPs allow you to hold GBP, EUR, and USD.
No OTC
Unlike QROPS, SIPPs are not subject to the overseas transfer charge.
Key Comparison:
SIPPs remain under UK rules (including IHT from 2027). QROPS avoid UK IHT but come with higher costs and possible OTC.
Taxation of UK Pensions in Spain
Understanding how your UK pension is taxed in Spain is essential for effective financial planning. Spanish residents are generally taxed on worldwide income, including private and occupational pensions, while UK government pensions may remain taxable in the UK.
For the latest information on Spanish income tax rates, wealth tax, and double-taxation rules, explore our full guide below.

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Why Expert Guidance Matters for Pension Transfers
Managing pension taxation in Spain can be complex and often requires specialist advice to ensure you comply with local rules while optimising your income. Transferring your UK pension is a big decision with lasting consequences. Whether you’re thinking about a SIPP, a QROPS, or leaving it where it is, make sure you understand the pros, cons, costs, and tax implications. Professional, independent advice is essential to ensure your retirement savings work best for you, wherever you choose to live.
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An initial 15-minute introduction call explaining our services and how we can help.
We go through a fact-finding exercise so we can then provide a full financial planning report including a personalised retirement forecast with future projections and work out how on track you are.
Lastly, we will provide a recommendation on any areas where we feel you could improve.
Who is SJB Global and meet your adviser
Our regulations, Independence and Fees
Our process from start to finish
Area we help with including:
UK Pension Advice
Retirement Planning
Investment Planning
Tax Planning
US Expat Services
International Estate Planning
Note: Minimum managed assets for SJB Global is £100,000 or currency equivalent.
Licensing & Regulations
Nexus Global specialises in providing a regulatory platform and compliance support to international financial advisers and intermediaries to enable them to meet regulatory requirements to provide their clients with a professional service. The financial advisers trading under SJB Global are members of Nexus Global. Nexus Global is a division of Blacktower Financial Management (International) Limited (BFMI). All approved members of Nexus Global are appointed representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission (FSC) and bound by the rules under licence number 3647: http://www.fsc.gi/regulated-entity/blacktower-financial-management-international-limited-3647.
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