Spain is tightening pension eligibility starting this August: find out if this applies to you
Make sure your pension payments are up to date as this change takes effect across Spain
Earlier this year, the Spanish government introduced several welcome pension measures designed to make active retirement more financially attractive. They also streamlined several previously tricky application processes. Now, more change is a foot. But this time, it relates only to contributory pensions and will likely not be welcomed by anyone approaching retirement age.
As of August 1, if you have any unpaid or late Social Security contributions, this could affect how much pension you get, or even whether you qualify for some benefits.
The pension in Spain depends on contributions made throughout a person’s working life. Both employees and employers contribute to Social Security and these payments form the basis for calculating the pension amount. To qualify for an indefinite contributory pension, an individual must meet minimum contribution requirements along with other specific criteria.
From August onwards, Social Security will only count contributions that have been paid correctly and within the legal deadlines. This means that if any payments were missed or made late, those periods will be excluded from the pension calculation.
As a result, this could significantly reduce the final pension amount or even make it harder to qualify for certain benefits.
To avoid surprises when applying for retirement, it is advisable to review your Social Security records. You can access your employment history and contribution reports through the Social Security Online Office.
Pay special attention to any gaps, missing periods or unusually low contribution amounts.
If you discover unpaid contributions or errors, there is still time to fix these issues. The deadline to regularise your payments is July 31, 2026. By doing so, you can ensure all your contribution periods count towards your pension and protect your future retirement income.
Being aware of these changes and staying on top of your Social Security contributions is essential. Taking action early will help you avoid any unexpected reductions in your pension when you retire.
Also of interest: Navigating UK pension transfers to Spain: A strategic approach
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Blacktower Insurance Agents and Advisors Limited is authorised and regulated by the Cyprus Insurance Companies Control Service (ICCS) under Licence number 5101. Blacktower Financial Management (Cyprus) Limited is licensed and regulated by the Cyprus Securities &Exchange Commission (“CySEC”) with Licence number 386/20.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Financial Advice Issues for Expats in Spain
I have been a Qualified Financial Adviser for almost 35 years now. 25 years in the UK for major institutions such as Natwest, RBS and Royal London. I have been in Spain giving expats financial advice now for 10 years and it is quite remarkable the different approaches as well as advice that is required for an expat now living in Spain. Blacktower is a company that has specialised in providing the best solutions for its clients living outside the UK for 30 years also.
The currency issue is always high on the agenda and a discussion for the long term future has to be taken onto account. Questions like What will happen if one partner dies? Will the other remain in Spain? What about other family members? What Inheritance tax provisions do you have in place? The list goes on and on.
Existing portfolio’s and investments that were the mainstay of portfolios in the UK may now be obsolete. An example of this is quite often tax efficient products in the UK like ISA’s and previously held TESSA’s PEP’s actually have low growth rates and provide no tax advantage to a Spanish fiscal resident.
Existing Pension holdings either paid by the state or private pensions built up through working lifetimes are topics that have to be covered. Many expats have lots of small pensions from many ex employers and can be confused by the communications and administration in dealing with them. At Blacktower we specialise in advising on how to consolidate and bring all these pensions together in one place.
Bank accounts and investments in Spain always bring up lots of questions too. Quite often the small print associated with financial products in Spain is in Spanish this can make it very difficult even if you have a good grasp of the language. Understanding Jargon in English is sometime difficult enough. I provide clear easy to understand letters and documents in English so that you fully understand any terms and conditions before making a decision.
Advice on tax efficiency is just as important and offering good returns. There are products available exclusively for Spanish expats that can provide invaluable benefits. Having a good base knowledge of the tax implications both now and in the future is an essential ingredient to making a sound decision.
I will complete a thorough factfind, ask you the right questions, establish your individual needs, attitude to risk and capacity for loss and desired returns before providing you with a full written report of advice and my recommendations in plain English. You will then have time to read and consider all the information before contacting me with how you wish to proceed.
Click for more information about Keith Littlewood.
The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.
The Blacktower group of companies operates across multiple jurisdictions, each authorized under its respective regulatory license. For further information, please refer to the relevant regulatory page.
