Spain remains the most popular destination for British expats retiring overseas. Spain is also hosting the largest group of UK citizens living in the rest of the EU at an estimated 310,000 in 2017.
The number of Britons living in Spain over the age of 65 has more than doubled in the past 10 years, according to official statistics, and the average age of British expats is 51 years old.
There are several questions in the minds of those living and working in Spain, or planning to retire there before the departure of the UK from the European Union.
How can Social Security contributions be requested? what If I have worked in both countries? What pension would I be entitled to? The British or the Spanish one?
What will happen to British expats’ pensions after the UK leaves the European Union?
The EU members guarantee the coordination and exchange of communication between Social Security systems. This coordination makes possible the collection of contributions to Social Security and therefore, the payment of pensions in any EU country, EEA (European Economic Area) and Switzerland in accordance with the EU Regulations 883/04 and 987/09).
Before 31st December 2020
There will be no change to the rights and status of UK nationals living in the EU while the UK remains in the EU.
You can claim your UK State Pension abroad if you’ve paid enough UK National Insurance contributions. You’ll usually need at least 10 qualifying years on your National Insurance record to get any UK State Pension and a maximum of 35. The pensions will be proportioned to the number of years contributed and there are different options.
Expats living in the EU or European Economic Area (EEA) are protected by the EU law and they will continue receiving the annual inflationary increases to their state pension benefits as UK residents.
Applying for pensions when working in more than one EU country – which one to claim
If you’ve worked in two or several EU countries, you may have accumulated pension rights in each country.
You only need to claim your state pension in the last country where you have lived or worked. Your claim will cover all EEA countries including the UK, Gibraltar, and Switzerland. You do not need to claim for each country separately.
Previous to claiming your pension, it is convenient to keep your National Insurance Number, P60 and P45 that you should have got after finishing your last work contract in the UK.
Let’s take the example of Spain and the UK if you have worked in both countries or worked in the UK and live in Spain:
1. Where to claim
- If you have not worked in Spain but live in Spain at the time of retiring,
You should claim your UK state pension by contacting the International Pension Centre.
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.
- If you live and last worked in Spain but have worked in the UK or/and other EU countries
You should make your claim for your pension from the Instituto Nacional de la Seguridad Social.
This Spanish institution will be responsible for processing your claim and bringing together records of your contributions from all the EU countries you worked in.
2. Retiring age in the UK and Spain
You would claim your pension where you now live (or last worked) once you have reached the legal retirement age in that country. You do not need to claim pension to each of the countries where you have worked.
The British State Pension age is worked out based on your gender and date of birth. You can check your state pension age here.
The Spanish retiring age is 65 years old in 2018 for all genders, increasing to 66 in October 2020 and 67 in 2028). There will be future revisions of the pension age and this may change.
3. How your pension is calculated
Pension authority in the country where you live at the time of claiming your pension will contact authorities in each EU country you have worked in. Each of these EU countries will look at the contributions you have paid into their system, how much you paid in other countries, and for how long you have worked in these countries.
To find out more about how your pension is calculated, eligibility periods and payment of your pension in this link.
4. State Pensions after Brexit for British nationals while living in Spain
This is What you need to know
The UK remains a full member until it exits the EU, and all rights and obligations of membership remain in place until then.
In December 2017, the UK government and the European Commission reached agreement in principle across the following three areas under consideration in the first phase of negotiations, on which further detail is set out in the Joint Report from the negotiators of the EU and the UK on progress: protecting the rights of Union citizens in the UK and UK citizens in the Union; the framework for addressing the unique circumstances in Northern Ireland; and the financial settlement; after the UK leaves the EU on 29 March 2019.
More information in the Comparison Table of the UK and EU positions on Citizens’ Rights.
As it states in Point 28 of the agreement the European Union and the United Kingdom government:
Social security coordination rules set out in Regulations (EC) No 883/2004 and (EC) No 987/2009 will apply. Social security coordination rules will cover Union citizens who on the specified date are or have been subject to UK legislation and UK nationals who are or have been subject to the legislation of an EU27 Member State, and EU27 and UK nationals within the scope of the Withdrawal Agreement by virtue of residence. Those rules will also apply, for the purposes of aggregation of periods of social security insurance, to Union and UK citizens having worked or resided in the UK or in an EU27 Member State in the past.
James Walsh, of the Pensions & Lifetime Savings Association, said: “The UK and EU have agreed that the UK will continue paying and uprating state pensions to UK citizens living in EU countries after Brexit – and vice versa.
“This means, for example, that British pensioners living in Spain will continue to get the same annual inflation increases they would have got in the UK. The same will apply to Spanish pensioners resident in Britain.”
On 19 March 2018, the UK reached a further agreement with the European Commission on the terms of a time-limited implementation period that will start on 30 March 2019 and last until 31 December 2020. This means that all UK nationals lawfully residing in another EU Member State on 31 December 2020 will be covered by the citizens’ rights agreement reached in December.
Eva De Francisco
Del Canto Chambers