June 18, 2024

Date Published: 17/11/2021

In order to avoid lowering pension rates, the Spanish government is on a mission to refill its dwindling coffers

Help for retiring baby boomers in Spain: 41 billion to be raised in the next 10 years

The Spanish government is aiming to collect a buffer of 41 billion euros by 2032 to help finance the retirement of the baby boom generation, born between 1958 and 1977.


Those who have worked and paid their social security in Spain are eligible to receive a state pension, but there has been worry recently that the government will be unable to afford to make pension payments in a few years’ time.



It had to be this way so that the flow of money goes “in the right direction of raising income instead of reducing pensions,” as noted by Mariano Hoya, representative of the UGT union, who added that a small effort would be needed to secure the future of pensions in Spain.


National spending on pensions in Spain from government coffers is growing faster than GDP due to a combination of three factors: the increase in benefits in line with inflation; the increase in the number of pensioners because people are living longer; and the retirement of workers with better working careers and therefore higher pension pay-outs.



For those expats living in Spain who have a private pension in another country which can be transferred to their new home, it is best to seek the advice of a professional Financial Advisor as the Spanish bureaucratic system can be very confusing.


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Financial Advice Issues for Expats in Spain

BLACKTOWER Financial ManagementI have been a Qualified Financial Adviser for almost 30 years now.  25 Years in the UK for major institutions such as Natwest, RBS and Royal London.  I have been in Spain giving expats financial advice now for 5 years and it is quite remarkable the different approaches as well as advice that is required for an expat now living in Spain.  Blacktower is a company that has specialised in providing the best solutions for its clients living outside the UK for 30 years also.

The currency issue is always high on the agenda and a discussion for the long term future has to be taken onto account.  Questions like What will happen if one partner dies? Will the other remain in Spain? What about other family members? What Inheritance tax provisions do you have in place? The list goes on and on.

BLACKTOWER Financial ManagementExisting portfolio’s and investments that were the mainstay of portfolios in the UK may now be obsolete.  An example of this is quite often tax efficient products in the UK like ISA’s and previously held TESSA’s PEP’s actually have low growth rates and provide no tax advantage to a Spanish fiscal resident.

Existing Pension holdings either paid by the state or private pensions built up through working lifetimes are topics that have to be covered.  Many expats have lots of small pensions from many ex employers and can be confused by the communications and administration in dealing with them.  At Blacktower we specialise in advising on how to consolidate and bring all these pensions together in one place.

BLACKTOWER Financial ManagementBank accounts and investments in Spain always bring up lots of questions too.  Quite often the small print associated with financial products in Spain is in Spanish this can make it very difficult even if you have a good grasp of the language.  Understanding Jargon in English is sometime difficult enough.  I provide clear easy to understand letters and documents in English so that you fully understand any terms and conditions before making a decision.

Advice on tax efficiency is just as important and offering good returns.  There are products available exclusively for Spanish expats that can provide invaluable benefits.  Having a good base knowledge of the tax implications both now and in the future is an essential ingredient to making a sound decision.

BLACKTOWER Financial ManagementI will complete a thorough factfind, ask you the right questions, establish your individual needs, attitude to risk and capacity for loss and desired returns before providing you with a full written report of advice and my recommendations in plain English.  You will then have time to read and consider all the information before contacting me with how you wish to proceed.

Click for more information about Keith Littlewood.

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Financial Management (Int) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) and is registered with both the DGS and CNMV in Spain