Key steps to transfer pension from the UK to Spain
If the idea of a sun-dappled retirement appeals and you hope to join around 300,000 fellow UK expats in Spain, it is worth understanding how your UK pension can be accessed overseas. Transferring a pension from the UK to Spain is usually possible and generally straightforward, although it requires some planning. Many UK residents retire in Spain each year, attracted by the warm Mediterranean climate, lower cost of living, established English-speaking communities and the country’s modern healthcare system and well-funded public services.
In this article we explain the terminology you need to understand and the key steps involved when you transfer a pension from the UK to Spain.
UK pension schemes: what can and can’t be transferred to Spain
Most UK schemes – whether work or private pensions, can be transferred to Spain. This includes defined contribution pension schemes, which combine your savings with contributions from your employer and tax relief from the government. But do check the smallprint of your own scheme(s) as a first step. Some pension providers may have more restrictions than others.
State pensions cannot be transferred to Spain, but payments can still be received in either a Spanish or UK bank account.2
What is a QROPS and why transfer to one when you transfer pension from the UK to Spain?
In most cases, to transfer your pension to Spain you’ll need to choose a Qualifying Recognised Overseas Pension Scheme (QROPS). This is simply an overseas pension that is recognised to receive transfers from a UK pension scheme. HMRC has a list of eligible schemes.3
If the scheme you want to transfer into is not a QROPS, your UK pension provider may refuse to transfer your pension. Alternatively, you might be charged a whopping 40% transfer tax.4
Even with a QROPS in Spain, transfer fees and taxes may still be charged, but they won’t be as high. It is advisable to obtain guidance from a pension or tax specialist before you transfer pension from the UK to Spain.
Transfer taxes when you transfer a pension to Spain
Transferring your UK pension to Spain could incur the UK resident 25% overseas transfer charge. That’s quite a hit, but there’s a good chance you won’t have to pay for it. In fact, if you live in the country where your QROPS is, the tax doesn’t apply. Note that you will have to pay it if you subsequently move out of the country your QROPS is based in, if you do so within five years of the initial transfer.5
You also won’t have to pay the tax if the amount transferred does not exceed your available overseas transfer allowance, which is currently £1,073,100.6
For most people preparing to transfer pension from the UK to Spain the likelihood of being charged the overseas transfer tax is low, although your UK provider may apply its own fees.
How to transfer your UK pension to a QROPS in Spain
Once you’ve checked your pension’s small print and found a QROPS in Spain, you’re ready to start the transfer process. This can take some time so plan ahead if you need the transfer to be in place on a specific date.
You can fill in form APSS263 and give it to your pension scheme administrator. Include details like your current or former UK address, National Insurance Number and details of the QROPS you’ve chosen to transfer your pension to.
Complete the form accurately. Even small mistakes can lead to delays. If all required details are not provided within 60 days of submission, the 25% overseas transfer tax may apply.7
Income taxes in Spain
Pensions are taxable income. Thanks to the UK-Spain Double Taxation Treaty, as a Spanish resident you will only pay tax on private and workplace pensions in Spain, not in the UK. Tax rates can vary between Spanish regions.
Tax can be complex and you should consult an expert before deciding on the best course of action for your circumstances. One thing to consider is that in the UK you are typically allowed to take 25% of your pension pot as a tax free lump sum.8 That doesn’t apply in Spain, so the lump sum will be taxed in full as income unless you take it before you become a Spanish tax resident.
There is more detail on tax on the Spanish government website but again, we advise you to seek professional advice.9
Practical considerations when you transfer a pension from the UK to Spain
You don’t have to set up a Spanish bank account to receive pension payments, but it’s certainly useful. That way you can have your pension paid directly into your local account in euros, making it easier for spending and managing your finances.
Another consideration is how you’ll transfer your pension pot (or pots) in the first place. At Lumon, we understand how important it is to get the most from your money transfers. That’s why we offer bank-beating exchange rates so more of your money goes where it’s needed. We boldtailor our service to your specific goals, helping you move your money at the right time and at a rate that works for you, with no hidden transfer fees, ever. This can help preserve more of your pension savings when you transfer pension from the UK to Spain.
When you are sending money to Spain, it’s important to plan carefully, as exchange rates fluctuate constantly due to economic and geopolitical events. Lumon’s dedicated currency specialists monitor the rates for you, providing market insights so you can make your international transfers with confidence.
One way to make managing regular payments simpler is through Lumon’s Regular Payment Plan* which automates transfers for recurring expenses like mortgages and pensions. You can manage the plan through your online account, ensuring your payments are made on time, while avoiding the stress of manual transfers.
Transfer your pension from the UK to Spain: long-term planning
If you’re still living and working in the UK, you can start preparing the ground for your retirement in Spain long before you go. In fact, it’s best if you do.
Check your work and private pensions for transfer eligibility. If transferring to a QROPS will be difficult or costly, where possible consider changing pension schemes well in advance of any move.
Remember also that a 25% tax free lump sum will not be available after you become a tax resident in Spain, so factor this into your long-term planning.
After that, the usual pension planning rules apply. Work out how much you’ll need to live comfortably in Spain and adjust your pension contributions accordingly, taking tax into account. Think about the best and most cost-effective ways to send a substantial pension pot to Spain.
And finally, start dreaming of lazy days under a warm Spanish sun.
*Please note that terms and conditions apply. Speak to a member of our team to enquire about your eligibility to set up an RPP.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Lumon or its subsidiaries, and it is not intended as a substitute for obtaining advice from the relevant professional services. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
Sources used:
- OFFICE OF NATIONAL STATISTICS – Migration figures
- GOV.UK – State pension abroad
- GOV.UK – QROPS list
- GOV.UK – Transferring to an overseas pension
- GOV.UK – Transferring to an overseas pension
- GOV.UK – Transferring to an overseas pension
- GOV.UK – Transferring to an overseas pension
- GOV.UK – Tax free lump sum
- SPAIN.GOV – Tax and pensions
Sources last checked on 12/12/2025
