Retirement in Spain? Here’s what you need to know

When many of us dream about how we will spend our days of retirement we imagine sunshine on our face, the smell of the sea lingering in the air, and plenty of good and cheap food and drink to indulge in. Spain is the realisation of this vision for many expat’s – and understandably so. If you are considering spending your golden years in Spain, here is what you need to know.

Is retiring to Spain a good idea? 

Yes, with an easy-going lifestyle, top-class healthcare, sunshine all year round, and the ability to jump into the pool or sea in November and not be completely frozen, the benefits for expatriates to come and retire to Spain are endless.

The cost of living is much cheaper in Spain, in comparison to that of the UK. With the average estimated cost of living per month in Spain for a single person being €642.77 without rent. With eating out also cheaper and getting more value for  money on various items such as property, groceries and fashion. The Spanish way of life is more economical for you and your retirement. 

What do I need to retire to Spain from the UK?  

With the ever-changing environment as a result of Brexit, it is now required that UK citizens obtain a visa to be able to live in Spain. If you desire to stay in Spain for any longer than 90 days, it is essential for you to apply for a Golden Visa or Non-Lucrative Visa.

The visa’s requirements differentiate so it is important that you go for the one best suited for you. The Spanish Government requires a single applicant for a Non-Lucrative Visa to demonstrate at least €27,115.20 through their account per annum or €33,894 a year for a couple 

With a Golden Visa, the financial requirements are lower. However, the Spanish Government requires a capital outlay of €500,000 on property.

What about my pension?  

If you decide to become a resident of the beautiful Iberian Peninsula and transfer pensions over, any income drawn from those pensions will be taxed under Spanish regulations.

Pensions are viewed as income in Spain and the percentage of tax is between 19 to 47 per cent. However, retiring in Spain does come with its benefits. Those between the ages of 65 and 74 are entitled to higher personal allowances of €6,700 a year for those under 75 the over 75s benefit from an allowance of €8,100 a year.

What happens if I need to go into care?

According to countrymeters.info, there are 7.9 million people over the age of 64 living in Spain, 340,000 of whom are foreign nationals. Whether it be Spain’s famous sangria and tortilla keeping residents healthy, or the traditional model of in-home attendance by family members and home care professionals, only 380,000 people are in retirement homes.

Let’s break that number down further. Pre-Pandemic, there were 381,340 beds available for full-time retirement home residents, 95,898 (25 per cent) of which were state-run. The remaining 285,422 (75 per cent) were managed by the private sector. As inflation has outpaced the funding allocated to the state-run facilities, now more than ever private sector housing has become even more prominent.

In order to combat the rate of ageing vs. the number of beds available, the Spanish government offers subsidies to people who opt for in-house care. Ranging from a qualified caretaker to a registered nurse, these individuals will help the elderly with daily routines such as bathing, eating, prescribed exercise, medicinal intake, monitoring complex health conditions, and staving off the loneliness that can overcome the elderly. The price for this service is based on financial situation, but is the least expensive route for retiring.

The three other options available are:

State-Run: These services are allocated towards Spanish-born citizens primarily, with extra availability being dealt to foreign nationals. The payment for this service is on a sliding scale, but a maximum is required. If the resident chooses to dedicate their pension towards this service, 80 per cent will automatically be deducted to cover costs.

Plaza Concertada: A privately owned and managed residency, with public financing for certain qualified individuals. A resident will still be required to pay forth a maximum, but in some cases, the remaining cost will be paid by the Spanish government. Spanish-born citizens also have preferential treatment in these facilities.

Private Places: At these privately owned and managed facilities, the resident is expected to pay the entire cost. The expenses for these facilities range widely depending on which autonomous community you chose to reside in. For example, the cheapest domicile to retire in belongs to Castilla La Mancha, at €1421/month. On the opposite end of the spectrum, the Basque Country charges €2,496/month on average.

The pecking order for how payment is to be received is as follows:

• Bank account: If the entirety of the costs can be covered via savings, then that is all that will be drawn from in order to pay the bill. If not, the remainder will be covered by the pension.
• Pension: If you opt to pay with your pension, the full amount of the cost must still be covered. Unlike public services, the limit does not stop at 80 per cent. If savings and pension alone do not cover the costs required, the Spanish government will recommend the liquidation of assets.
• Assets: If forced to liquidate your assets such as a house, car or investments, the privately run care facility will only take what is necessary to cover the expenses. In the passing of the resident, all payments come to an end and whatever money is left over will be allocated to the family.

As most things go, the key to preservation is preparation. With waiting lists for public care retirement growing longer, and private care retirement plans becoming more expensive, it is paramount to see what is available in your region before the service becomes a requirement. Take the necessary steps to plan out your Golden Years in a golden fashion.

The sunshine is only a flight away, with the tapas, tortillas, paellas, and wine calling your name. With beautiful walks at sunset on the beach or around the other glorious areas of Spain. What is stopping you? 

The Spanish way of life is beautiful and the culture that comes with it is fascinating. In many areas of Spain, English is common however, if you are looking to do something new while you retire, there are many Spanish classes you can take to begin to know and understand the language more. 

With plenty of sports facilities for tennis, golf and walking football, there is a welcoming atmosphere and community of other expatriates and social groups waiting to welcome you!

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