Expat financial advice from the experts

UK pension transfer to Spain – Things to know

UK pension transfer to Spain

If you’re looking for somewhere relaxing and sunny to retire, then look no further,  Spain is the place for you. What more could you ask for than living in the sun and enjoying some Spanish tapas in a  friendly environment?  For those of you who live in Spain or plan to do so, have you thought about transferring your UK pensions to Spain? 

Your position as an expat

When you move to a new country, you normally have to re-evaluate your financial situation.  You would also need to assure your affairs and insurances are updated and in accordance with the law of your new home.  Also, you may start thinking about opening new savings and investment plans for your future. When opening a new plan, many expats forget about their current arrangements in other countries, such as pensions or tax-friendly investments. 

Transferring your UK pension

If you live overseas and you are no longer a UK resident, you also have the possibility of taking your pension with you.  Nevertheless, before transferring your pension, you should consider whether this is the best option for you.  As it could be more beneficial to stay in your current scheme, depending on what type of pension you hold.  On the other hand, it could be more profitable to transfer your pension overseas. For instance, several Defined Benefit pensions, also known as Final Salary, are very valuable.  As they provide the beneficiary with a guaranteed annual income for the rest of his/her life. On the other hand, at times it could be wise to transfer your pension overseas. Due to the possibility of profiting from a greater pension value when requesting for a transfer value quotation.  Nonetheless, one should evaluate the advantages and disadvantages of both options before deciding which one is best for you.

Why transfer your UK pension to Spain?

As mentioned above, one of the reasons to transfer your UK pension is to profit from the possibility of a greater transfer value. This large transfer value could provide a higher annual income than the guarantee of the current scheme.  The increase in the transfer value could be due to the low value of government bond yields, low-interest rates, and a volatile stock market. Furthermore, there are various schemes that are underfunded.  This could lead to the trustees preferring that members take their pensions now, rather than having to support them throughout their retirement.

Other benefits of transferring your pension could be:

  • Have greater control over your investment
  • Ability to access 100% of your pension
  • Earlier penalty-free access (from the age of 55)
  • More appropriate  death benefits

Things to consider when transferring your UK pension to Spain:

Due to the current stock market volatility and low-interest rates, the transfer values are much higher than usual.  Furthermore, the fall of sterling in comparison to other major currencies is becoming a currency risk concern for many.

What step shall I take next?

Harrison Brook believes that knowledge is power.  Knowing what options are available to you and accurately assessing them is taking control over your financial life. As previously mentioned, before deciding if a UK pension transfer to Spain is beneficial, one should assess the pros and cons of each available option.

Harrison Brook can assist you with analysing your current financial situation and evaluate your options.  As well as recommend which option best fits with your current position and future plans.

Get in touch and speak to a fully qualified adviser regarding your financial position.

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