Many are asking how the state pensions work once you live in Spain either working then retiring or just coning to retire
If you have worked in several EU countries, you may have accumulated pension rights in each of them.
You will need to apply to the pension authority in the country where you are living, or you last worked.
If you've never worked in the country where you're living, your host country will forward your claim to the one you last worked in.
That country is then responsible for processing your claim and bringing together records of your contributions from all the countries you worked in.
In some countries, the pension authority should send you your pension application form before you reach that country's retirement age. If you don't receive it, check with your pension authority to see whether they will automatically send it to you.
Pensions in Spain for expats
If you have moved to Spain from another EU/EFTA country, your insurance contributions in other EU member states can count towards calculating your eligibility for a Spanish pension.
For example, if you only worked in Spain for 10 years but previously worked in the Netherlands for 20 years, you can qualify for a pro-rata Spanish pension as well as a pro-rata Dutch pension. For example, you will receive a reduced pension rate only for the years you worked.
You will start receiving these pensions once you reach the legal pension age in each country. This means the amount you receive may vary if these pension ages are different. The country where you are living is responsible for processing your claim and bringing together your records from all the countries you have worked in. So if you’re an EU expat living in Spain, the Spanish government will administrate your state pension.
Spain also has bilateral social security agreements with a number of non-EU countries. These provide varying conditions for transferring pension and social security benefits depending on the country.
Differences in retirement ages
In some EU countries, you will have to wait longer to start drawing your pension than in others.
You can only receive your pension from the country where you now live (or last worked) once you have reached the legal retirement age in that country. If you have accumulated pension rights in other countries, you will only receive those parts of your pension once you have reached the legal retirement age in those countries.
So it's important to find out in advance, from all the countries where you have worked, what your situation will be if you change the date on which you start receiving your pension.
Here we have 3 types, I will list them below.
Ordinary retirement (jubilación ordinaria)
Flexible retirement (jubilación flexible)
Partial retirement (jubilación parcial)
Ordinary retirement: in Spain, you can apply for a life retirement pension when reaching the legal retirement age.
In general you can apply for this pension if you are affiliated to any social security system and meet the age and contribution requirements. It is worth knowing that the retirement age, which varies according to the contribution period, will be applied gradually during the next few years, according to a scale:
Age: you can apply for this pension if you have reached the ordinary age, apart for some exceptions. Currently, the minimum age for applying for this pension is 65, if you can prove you have paid at least 37 years of contributions or 65 years and ten months if you have less contributions. Workers who apply for this pension without being registered with Social Security must meet the same requirements.
Minimum contribution period: 15 years, of which two at least should fall within the 15 years immediately preceding the start of your entitlement.
There are guaranteed minimum and maximum amounts (€2,683.34 in 2020) and the annual indexation.
Payment starts from the day after leaving work (for applications submitted during the three months before or after) and only end on the death of the beneficiary (life pension).
Flexible retirement: after you retire, you can combine receiving a part of your pension with part-time work (reducing your full working day by 25% to 50%). Your pension is reduced proportionally.
In order to access this type of retirement you should meet the requirements (age and contributions) required in the case of ordinary retirement and prove that you are going to work part time, with a reduction in your working day of 25% to 50%. Even though you combine your pension with part-time work, you will continue to be a "pensioner", which means you will have the same healthcare entitlement as an ordinary pensioner.
Calculation of the amount of this type of pension is based on the pensioner's ordinary retirement and is reduced proportional to the working day. Before starting part-time work, you should inform the institution which handles your payments as a pensioner (INSS) about your new circumstances. The new amount of your pension is applied from the day when you start your part-time work. The original amount will be re-established, once it has been recalculated, when your part-time contract ends.
Partial retirement: if you have not reached the legal retirement age, you can combine a part-time employment contract with receiving part of your retirement pension. This retirement should be linked to a hand-over contract, that is, the part-time hiring of an unemployed worker. If you have already reached the legal retirement age, there is no need to sign a hand-over contract.
you can retire partially if you have reached the legal retirement age, reduce your working day by 25% to 50% and meet the rest of the conditions required for ordinary retirement.
The amount of this type of pension results from applying the percentage of reduction of the working day to the amount of the corresponding pension, according to the years of contributions. Reduction coefficients are not applied for being younger than the legal age.
You can also take partial retirement before the legal retirement age (with a minimum age that varies depending on the case) if, furthermore, you have a minimum of 6 years of service in the company, have been paying contributions for 33 years and your company signs a hand-over contract.
There are also other possibilities to combine retirement pension with work.
You can apply for an ordinary, partial or flexible retirement pension in the centros de atención e información de la Seguridad Social of the Instituto Nacional de la Seguridad Social (INSS), which will confirm your entitlement to a retirement pension. Once you have applied, you should receive a reply on your pension award within a maximum period of 90 days.
UK State Pension You can carry on receiving your UK State Pension if you move to live in the EU, EEA or Switzerland and you can still claim your UK State Pension from these countries. Your UK State Pension will be increased each year in the EU in line with the rate paid in the UK.
You can also count relevant social security contributions made in EU countries to meet the qualifying conditions for a UK State Pension.
This guidance is for UK nationals; however these rules on the State Pension apply to everyone regardless of your nationality and regardless of when you moved.
Your UK State Pension will be based on your NI
You need 10 years of UK National Insurance contributions to be eligible for the new State Pension.
You may be able to use time spent abroad to make up the 10 qualifying years. This is most likely if you’ve lived or worked in:
certain countries that have a social security agreement with the UK
Example You have 7 qualifying years from the UK on your National Insurance record when you reach State Pension age. You worked in an EEA country for 16 years and paid contributions to that country’s state pension. You will meet the minimum qualifying years to get the new State Pension because of the time you worked overseas. Your new State Pension amount will only be based on the 7 years of National Insurance contributions you made in the UK.
Claim State Pension abroad
You can claim State Pension abroad if you’ve paid enough UK National Insurance contributions to qualify. Get a State Pension forecast if you need to find out how much State Pension you may get. Make a claim You must be within 4 months of your State Pension age to claim. To claim your pension, you can either:
Contact the International Pension Centre
Send the international claim form to the International Pension Centre (the address is on the form)
If you live part of the year abroad You must choose which country you want your pension to be paid in. You cannot be paid in one country for part of the year and another for the rest of the year.
As usual please get in touch for further help and assistance