Hi, Can you tell me if a person moves to Spain before Retirement age
                  from u.k. would you lose your u.k. State Pension Entitlement.

                    I’m 55…& very Tempted to Escape.

Your still entitled to your pension.

see here

http://www.dwp.gov.uk/international/sa29/benefits_09.asp

The other benefit to moving to Spain is the increase in money from the exchange rate, although lower than last year you`ll still gain an extra 20.00 Euros per ?100 exchanged.

It all helps.

Thank you for your help, even more tempting now!!!

Hi Marsol,

Definitely not - thats one of the benefits (and points?) of the EU - your rights are transportable.

You might be interested in this: (which I posted a few months ago)

As I decided to leave Britain after having made only 29 years National Insurance (NI) contributions I accepted the future consequence of not being able to look forward to a full UK State Pension.

This was because to claim a full pension you needed to make the full 44 years NI contributions to be entitled to a full pension. I decided at the time not to make any more donations to the UK government and settled for a pension of 29/44ths when my time came.

However a few weeks ago I decided to re-visit the situation and wrote to HM Revenue and Customs and asked them to satisfy my curiosity about how much it would cost to make additional pension top-up contributions.

I received a very surprising letter back informing me that the rules have changed and now only 30 years contributions are necessary under new legislation due to come into effect in April 2010.

So now I only have to make one more years contributions to top up to the full 30 years which seems like a windfall to me.

You only qualify for this change if you reach State Pension age on or after April 6th 2010 and I am delighted to say that I do!

If you would like to contact them write to:

Residence Residency
BP 1301
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ
UK

(Note if you are still UK resident this address may not apply)

Visit: http://www.hmrc.gov.uk

POSTED ON TIM AND TORRE SITES 9/5/08
SPAIN FORUM EXPAT 140608

Hi Marsol,

There are other benefits too.  If you have a private pension in addition to the State Pension it may be possible to transfer the private pension “pot” ie the money you have built up into another pension called a Qualifying Recognised Overseas Pension (QROPS).  You need good advice on the subject but IF it is right for you it means that you can leave your pension pot, after having had your pension income,  to the family.  In the UK you cannot do this.  So in the UK if you have, say 100,000 in your pot you will get a pension for life but on death the pension pot goes to the insurance company.  With QROPS you can take your pension and on death your family get the 100,000.

Seems good but it does need very, very careful planning.  There is more info on QROPS at http://www.expatfinancialadvicespain.com/qrops-advice.htm

Also there is a pan european savings plan, in some respects similar to an ISA.  If used properly, the rate of tax in Spain on savings can be less than in the UK!!

Regards

Barry

You do not have to worry about waiting to retire before you re-locate to Spain, if you have contributed to a pension scheme during your working life, you will want to make sure you can get the most available to you,

The laws were changed recently allowing UK pensions to be exported outside of the country. This allows you to make choices on how you take your pension benefits. There is another added bonus of course, the tax is less in Spain!

Should you choose to export your pension to Spain and live the rest of your life in comfort will improve your retirement and could also mean you leave your heirs a larger inheritance, a winner all round!

The new law that was approved introduced “QROPS” ? Qualifying Recognised Overseas Pensions Schemes. This means a non UK pension and meets the rules of the jurisdiction where they are located.

UK pension rights can now be transferred out of the UK and placed into a “QROPS”. There are, however, some rules laid out by HMRC - HM Revenue & Customs - that the provider must meet which relate to how these benefits can be taken. For five years after the fund holder has left the UK the reporting must be complied with.

With a UK “QROPS” you do not have to be resident in that country, unlike some other schemes from various countries. This gives you the freedom to choose a tax friendly jurisdiction that will benefit your pension scheme to the maximum!

For this to move smoothly for you, you must have already left the UK for tax purposes and then become a tax resident in Spain. Once this has all slotted into place you can transfer your pension fund out of the UK and into a “QROPS”.

There are many types of pensions that can be transferred, which include personal and occupational pension schemes.  Pensions that are in drawdown (even if currently in payment) and protected pension rights can also be transferred.

You cannot, however, move a basic state pension. If you have begun taking benefits you may struggle to move your pension.

Interesting piece about QROPS!  They can be very useful.

It might just be worth pointing out that the Inland Revenue take the view that the 5 year reporting relates to the time the trustees of the QROPS have to report and NOT that the individual only has to be 5 years non resident.  Several very high profile cases have been pounced upon by the Inland Revenue and they have just unlisted all Singapore based QROPS for pension busting (ie trying to get the money out before it has been in a QROPS 5 years).

It is fair to say that the differece of opinion could be down to sloppy drafting of the legislation.  Whatever the reason, the impact on an individual if they take their money out of the pension before they have had 5 years of membership will be a UK tax charge of between 40 and 55%.  EVEN IF YOU ARE RESIDENT IN SPAIN.

Residency is another issue where great care needs to be taken with QROPS.  Despite popular misconception spending 183 days in Spain or less than an average of 90 nights in the UK in any 4 years is not sufficient to determine that you have been NON resident in the UK.  All factors including the no of visits, where you get your earned income and if you still have property in the UK all have to be taken into account to determine residency.

We provide advice on QROPS because they can be a very useful way of not having to buy an annuity when you retire, giving you the opportunity to leave money to your hiers. But it is fair to say that we are very careful when providing this advice.

To be safe you have to be BOTH non resident for 5 years AND have been a member of a QROPS for 5 years before taking your money.

Barry Davys
Spectrum IFA Group
http://www.expatfinancialadvicespain.com

There seems to be some confusion over the 5 year rule. HMRC is quite clear on this it is 5 full tax years non residency, not from the date when you take the QROPS.

probably the best source for good info on this is these guys:

http://www.pension-transfers-qrops.com