International SIPP Spain

For British expatriates retiring in Spain, an International SIPP (Spanish SIPP) can offer many long-term benefits. The Spain International SIPP is still a UK pension, fully protected by the FCA and the FSCS, but with certain benefits that are applicable to Spanish residents. These benefits can be very valuable in retirement, and will likely not be offered by your existing workplace or private pensions in the UK.

QROPS Spain

(Qualifying Recognised Overseas Pension Spain)

In the past, there have been 2 options for Spanish residents with UK pensions - a QROPS or an International SIPP.

However, with the 2024 budget changes, a QROPS is now no longer a viable option. This is because the overseas transfer charge will now apply to all QROPS transfers if the QROPS is held in a different jurisdiction to where the policyholder lives. Given almost all QROPS accounts are held in either Malta or Gibraltar, an expat in Spain would lose 25% of their total pension value to the overseas transfer charge if they elected for a QROPS pension.

That leaves a simple choice for British expatriates in Spain with UK pension assets. This is to either leave the pensions with their existing UK pension providers, or transfer to an International SIPP.

UK Pensions In Spain How Do They Work?

It is vital for expats to understand how their UK private pensions work in Spain before considering any kind of pension transfer abroad. Below, we have curated a list of essential questions to ask your UK pension providers. Whilst this list is not exhaustive, it works as a very good starting point to making a future decision.

  • Will you offer me full-flexible access in retirement as a Spanish resident? Essentially, can you access your funds as and when you wish, whether it's a regular draw-down pension in Spain, or occasional lump sum payments from your UK pension.

  • Can I continue to manage my pension as a Spanish resident? Do I have access to whole of market investment funds and ETFs from the likes of Vanguard, Blackrock etc.?

  • Can you pay pension income to my Spanish bank account?

  • Can I hold my pension in Euros, to mitigate currency risk over the long-term?

If the answer to any of these is no, it's worth exploring your transfer options as there will be more beneficial solutions available to you.

The International SIPP For Spanish Residents

By using a UK pension product specifically built for Spanish residents, you can gain all of the above advantages as you retire in Spain. The Spanish SIPP will provide the following:

  • Full flexibility in pension payments and access in Spain.

  • Payment of funds into your local Spanish bank account.

  • Ability to access an independent and whole of market fund range from all the major investment providers.

  • Ability to have funds paid out to you without any UK taxation, with the use of an NT Code for Spanish residents.

Expert Retirement Advice In Spain For Expats

Retiring abroad, and cross-border financial planning in general, can be very complicated and occasionally overwhelming. At The Wealth Genesis, we offer fully regulated and independent financial advice to expats in Spain. This independence allows us to access any product and investment available at the lowest possible cost.

Our advisers have decades of experience in providing advice to Spanish residents, and always remain ahead of changes in legislation and pension planning optimisation. To understand how we can help you retire in Spain, and maximise your UK pensions as a Spanish resident, schedule an initial consultation with an expert expat financial planner using the diary below.

FAQs

  • With recent budget changes, unless the QROPS is physically based in Spain, you will lose 25% of your UK pensions upon transfer.

  • No, an international SIPP is still a UK based pension, and there is no tax charge for transferring into such a scheme.

  • Most advisers will charge between 1% and 5% for a UK pension transfer to Spain. At The Wealth Genesis, we charge all our clients the same one-off flat fee of £3,000, regardless of the value of your UK pensions.

  • UK Pensions will be treated as income in Spain, and will be taxed at your highest marginal rate of income tax depending on your earnings for any given tax year.