A high standard of living, quality healthcare, and scenic locations make Spain a preferred retirement destination for many expats. If you’re looking to spend your retirement years there, it’s essential to thoroughly understand the local pension system and the plans available to you.
In this guide on Spanish pension for expats, we’ll discuss available options, eligibility rules, and contribution requirements. We’ll explain how the Spanish pension system works for employed and self-employed individuals and outline the application process to ensure you have the necessary information to plan your retirement in Spain.
What You Will Learn
- What are the available Spanish pension options for expats?
- What are the eligibility requirements for Spanish pensions?
- How much do expats have to contribute toward their Spanish pension?
- What taxes do expats pay on their pensions in Spain?
How Does the Spanish Pension System Work?
Spain’s pension system is structured around three pillars:
- State pension.
- Occupational pension.
- Private pension.
State Pension
The state pension scheme in Spain is a part of the country’s social security system, and contributions toward it are paid for by eligible working residents, whether they’re employed or self-employed.
There are two types of state pension in Spain:
- Contributory pension: Plans that entail contributions from both employees and employers.
- Non-contributory pension: Plans for specific groups of Spanish citizens, including people with disabilities and low-income individuals whose yearly income falls below the threshold required to contribute to the social security system.
Occupational Pension
Occupational pensions in Spain are voluntary programs typically offered by employers as part of employee benefit packages. There are two types of occupational pension plans in Spain:
- Defined benefit: A plan where the employer covers 100% of the contributions.
- Defined contribution: A plan financed by both the employer and the employee. In most cases, the employer contributes 65-80%, while the employee covers the rest. Employees can choose different pension rates based on their contributions.
Private Pension
Private pensions, also called individual pension plans, are voluntary. Individuals can enrol in them to supplement their retirement income in Spain, with a contribution limit set at €10,000 or 30% of their annual salary (whichever is lower). Expats can choose from various private pension plans offering different benefits, such as flexible withdrawals or attractive compound interest rates.
What Are the Eligibility Requirements for Receiving the Contributory State Pension in Spain as an Expat?
Expats can receive the contributory state pension in Spain if they:
- Reach the minimum state pension age in Spain.
- Make sufficient contributions.
The retirement age in Spain is gradually increasing each year as part of a major pension system reform initiated in 2013 and set to be fully implemented by 2027. Under this reform, the retirement age rises by two months annually, while the required contribution period typically increases by three months each year.
By 2027, individuals will qualify for a full pension at the age of 67 or at the age of 65 if they’ve been contributing toward their pension for at least 38.5 years.
The table below summarises the required age and contribution periods in the upcoming years:
| Year | Required Retirement Age | Contribution Period |
|---|---|---|
| 2025 | 65 years | 38 years and 3 months or more |
| 66 years and 8 months | Under 38 years and 3 months | |
| 2026 | 65 years | 38 years and 3 months or more |
| 66 years and 10 months | Under 38 years and 3 months | |
| 2027 onwards | 65 years | 38 years and 6 months or more |
| 67 years | Under 38 years and 6 months |
To qualify for the minimum state pension rate, you’ll need at least 15 years (5,475 days) of contributions to the social security system in Spain. The contribution years don’t have to be consecutive, but at least two of them must fall within the 15 years immediately preceding the activation of the pension.
What Are the Pension Rates and Contributions for the Contributory State Pension in Spain?
The pension amount you’ll receive after retiring depends on several factors, such as:
- The number of contributing years.
- The amount of money you’ve contributed.
- Your age.
As a rule, employees contribute 4.7% of their salary toward their pension, while employers contribute 23.6%, which equals 28.3%. If you’re a freelancer, you’re required to cover both the employee’s and the employer’s contributions.
In 2025, contributory pensions have increased by 2.8%, reflecting Spain’s ongoing pension revaluation measures. The updated minimum pension rates are as follows:
- €12,241.60 per year for an individual aged 65 or older.
- €15,786.40 per year for pensioners with a dependent spouse.
These adjustments ensure that pensions remain in line with cost-of-living increases and inflation, providing retirees with a stable income.
What Are the Eligibility Requirements for the Non-Contributory State Pension in Spain?
To qualify for the non-contributory retirement state pension (pension based on low-income grounds) in Spain, you should:
- Be at least 65 years old when applying for the pension.
- Reside in Spain for at least 10 years in the last 16 years. The last two years need to be consecutive and immediately preceding the date of the application.
- Have a yearly income below a certain threshold (€7,905.80 as of 2025).
The yearly income threshold varies depending on the number of members in your household. The table below offers more details:
| Number of Household Members | Yearly Income (in 2025) |
|---|---|
| 2 | €12,326.02 |
| 3 | €17,401.44 |
| 4 | €22,476.86 |
To be eligible for the disability pension, one needs to:
- Be over 18 years old and under 65 years old.
- Live in Spain for at least five years, with the last two years immediately preceding the date of the application.
- Be affected by a disability rate equal to or greater than 65%.
- Lack sufficient income.
One can’t apply for both the low-income pension and the disability pension. Expats over the age of 65 should apply for the former.
What Are the Eligibility Criteria for Occupational and Private Pensions?
Occupational and private pensions in Spain are voluntary and the country doesn’t have specific laws to govern them.
Occupational pension schemes depend on employers as they determine the conditions and rates. Private pensions are personal plans with different benefits and conditions that individuals can choose based on their financial plans, budget, and needs.
How Can Expats Apply for the State Pension in Spain?
To apply for a Spanish state pension, you’ll need to visit the nearest Social Security office and provide the following documents:
- Resident card.
- Passport.
- Application form.
- Foreign identity number (NIE).
If you’re applying for the non-contributory state pension, you’ll need additional documents that confirm your eligibility.
What Taxes Do Expats Pay on Their Pension in Spain?
Withdrawing a Spanish pension will make you liable for personal income tax (IRPF). As the Spanish tax system is progressive, the tax amount you’ll pay on your pension depends on its taxable value—the higher the pension, the higher the tax rate.
Spain’s updated personal income tax rates for 2025 range between 19% and 30% for savings income and 19% to 47% for general income.
General Income Tax Rates (2025)
These rates apply to pensions and other earnings:
| Taxable Income | Tax Rate |
|---|---|
| Up to €12,450 | 19% |
| €12,451–€20,200 | 24% |
| €20,201–€35,200 | 30% |
| €35,201–€60,000 | 37% |
| €60,001–€300,000 | 45% |
| Over €300,000 | 47% |
Savings Income Tax Rates (2025)
These apply to pension lump sums, annuities, and investment withdrawals:
| Taxable Savings | Tax Rate |
|---|---|
| Up to €6,000 | 19% |
| €6,001 – €50,000 | 21% |
| €50,001 – €200,000 | 23% |
| €200,001 – €300,000 | 27% |
| Over €300,000 | 30% |
Expats can take advantage of tax deductions on their pensions. The rates vary depending on the region an expat lives in and their age.
Expats who reside in Spain and have pensions in other EU countries, the UK, or the US can withdraw them in Spain without paying double taxes thanks to Spain’s double tax agreements. Being Spanish residents, expats will pay income taxes only in Spain.
To ensure maximum tax efficiency and take advantage of available deductions, consult a tax expert. Professionals at Titan Wealth International can assess your circumstances and help you understand which taxes you’ll be liable for when withdrawing your pension in Spain.
Can You Continue Working While Receiving a Pension in Spain?
According to Spanish law, you can’t have a full-time job while receiving your pension, but there are two pension options that let you work during retirement:
- Partial pension.
- Flexible pension.
The pension amount you’ll receive under flexible or partial retirement is based on the percentage by which you reduce your working hours.
You can apply for partial or flexible retirement at the offices of the National Institute of Social Security (INSS). They will verify your eligibility and make the decision within 90 days of the application.
Partial Pension
The Spanish government allows you to partially retire before or after reaching the legal retirement age.
If you’d like to partially retire before the legal retirement age, you need to:
- Be at least 60 years old.
- Reduce your working day by 25% to 75%.
- Have worked at least six years at the company you want to work for part-time.
- Have paid contributions for at least 33 years.
In this case, you can enter a part-time or a full-time contract with your company. If you opt for the latter, there needs to be a relief contract stipulating that an unemployed person will fill in as a relief worker.
To partially retire after reaching the legal retirement age, you need to:
- Reduce your working hours by 25% to 50%.
- Ensure you’ve paid enough contributions toward social security to retire.
Flexible Pension
If you’re already retired but decide to go back to work on a part-time contract, you can take advantage of flexible retirement. In this case, you need to reduce your working day by 25% to 50%. An important rule to be aware of is that when you return to work, your new employer can’t be the one you worked for before retiring.
Once your request for the flexible pension is approved, your pension amount will be temporarily reduced. However, the contributions you make during your part-time contract will increase your full pension amount once you go back to retirement.
How Does Pension in Spain Work for Self-Employed Individuals?
Like employed workers, self-employed individuals need to contribute to social security to earn state pension rights. Self-employed individuals choose the contribution base they’ll pay toward the social security fund, and many opt for the minimum base. For this reason, they often have lower pensions than employed individuals.
To have more control over their pension fund and contribute an amount that won’t jeopardise them financially, self-employed individuals can change their contribution base twice a year:
- From 1 January to 30 April: The change takes effect on 1 July.
- Before 1 November: The change takes effect on 1 January.
Can Expats Transfer Pensions from Other Countries to Spain?
Expats can transfer pensions from other countries to Spain, although the conditions for doing so vary depending on the country of origin.
For example, if an expat has a pension from another EU country, no transfer is necessary—they can access their pension benefits in Spain.
Additionally, the contribution periods made in other EU countries can count toward the minimum contribution period requirement in Spain, with each social security institution paying a proportionate pension amount.
The process is more complicated for expats from non-EU countries, such as the UK. The UK has specific rules for overseas pension transfers, with a key requirement being that the scheme expats transfer to must be a qualifying recognised overseas pension scheme (QROPS). His Majesty’s Revenue and Customs (HMRC) has a list of all recognised overseas schemes worldwide, and there’s only one Spanish QROPS on it—Itzarri EPSV de Empleo.
Transferring to a non-QROPS scheme from the UK will result in a 40% tax charge on the transferred amount.
Another viable option for UK expats is transferring their UK pension into a Self-Invested Personal Pension (SIPP) instead of a Spanish scheme. Some of the benefits of transferring to a SIPP are:
- Regulated by the UK: Ensures financial protection under UK financial laws.
- Investment flexibility: Offers a wider choice of investment options than many overseas schemes.
- Contribution & withdrawal flexibility: Expats can manage how and when they access their pension.
- UK inheritance tax exemption: Funds in a SIPP are not subject to UK inheritance tax, making it a tax-efficient estate planning tool.
- Cost efficiency: In some cases, transferring to a SIPP may offer lower fees than QROPS.
If you’re a UK expat considering transferring your pension to Spain, it’s essential to seek expert advice. Consulting with pension transfer specialists at Titan Wealth International will help you navigate the rules and determine the best tax-efficient and financially beneficial option for your retirement.
Key Takeaway
In this guide, we’ve explored the various pension options for expats in Spain and discussed how expats can qualify for them. We’ve also explained the application process and the taxes expats will be liable for when withdrawing their Spanish pensions.
Some expats may wish to continue working in retirement, so we’ve provided information on how they can make this possible.
Finally, we’ve explained how expats can transfer pensions from their home countries to Spain, focusing on individuals transferring their UK pensions to a Spanish QROPS or a SIPP.
Expats who want to better understand their Spanish pension options and get assistance with pension transfers from abroad should work with experts. At Titan Wealth International, we offer a complimentary pension transfer assessment to help you identify the best option for your needs and guide you toward achieving your retirement goals in Spain.
