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Information For Foreign Residents Spanish Social Security – Who is Eligible? Pensioners from European countries who are paid-up contributors to the Social Security system of their home countries are eligible for Spanish health care whether they become fulltime residents or simply visit as tourists. If they transfer their residence and medial care registration to Spain, they no longer have the right to automatic health care in their home country except for emergencies arising on visits. Those woking in Spain and paying into the Spanish system are also elegible. They are required by law to register with Spanish Social Security whether they are self-employed or employed by others. Persons who are neither pensioners nor workers will have to contract a private medical insurance. Non EU citizens retiring in Spain must pay for their own private medical insurance unless they are working in Spain and paying into the Spanish system. Of course, Spanish Social Security hospitals will treat non-EU citizens in medical emergencies, but they may be billed for the treatment. Health Services – Pensions All citizens who lack sufficient means of support have the right to Social Security pensions for retirement of disability, even if they have never paid into the Spanish system or have not paid sufficiently to justify a normal pension. Such citizens also have the right to medical care and free provision of medicine under the Spanish Social Security System. Even non-Spaniards residing in country may qualify for one of these benefits. The pensions are minimal, usually about half of the normal retirement pension. Non-Contributive Old-age Pension – If you have lived in Spain for at least 10 years since the age of 16, including two years immediately before making application, and youare over 65, and lack means of support, you may qualify for this pension. Non-Contributive Disability Pension – Applicants must be over 18 and under 65 years old, must have resided in Spanish territory for five years, including two years immediately preceding the application. Applicants must have a handicap or chronic illness rated at 65% disability, and lack means of support. Complementary Social Services – These include old-age homes, social centres and clubs for the elderly, specialised care centres for the handicapped, rehabilitation and training programmes. Applications may be made through the National Institute of Social Services. Emergencies 061 is Fast Emergency Service – This telephone number reaches not only ambulance service but also a mobile intensive care unit manned by a doctor, a nurse and a medical technician. Trained operators, usually speaking several languages, determine the exact form of the rapid response. If your emergency involves a heart condition, chest pains, difficulty in breating, loss of consciousness or intoxication, this would be a case for calling 061 112 For All Emergencies – The 112 network now reaches almost all of Málaga Province. It is a central call base for any emergency. Trained operators at the centre take the information and decide the appropriate response. 902 505 061 – Central number for all medical emergencies. Birth – Weddings – Funerals The birth of a child on Spanish soil must be registered within 30 days. This registration will allow you to make a report to your own national Consulate, which will issue the certificate of birth of a citizen abroad, so you will have two certificates, the Spanish one and one from your own nation. The procedure for a civil wedding requires a lot of paperwork and you must allow at least two months for all the formalities, after you have your documents in order. All documents will need a Certificate of Apostille to verify them internationally and all must be officially translated into Spanish. You can start by requesting you Certificado de Empadronamiento at the foreign residents department, which will then provide you with a list of the documents for your individual case. Spanish funeral directors, like those in all countries, try to provide a one-call-does-it-all service. There are four points to bear in mind in connection with Spanish wills: 1. You should make a Spanish will dispsing of your Spanish propety in order to avoid time-consuming and expensive legal problems for your heirs. Make a separate will disposing of assets located outside of Spain. 2. As a foreigner, you will probably find that Spanish authorities do not oblige you to follow the Spanish law of compulsory heirs, in which you must leave two-thirds of your estate to your children. You can leave your estate to whomever you choose, as long as your own national law permits this. Your estate, however, will be subject to Spanish inheritance tax, which can be high when property is left to non-relatives. 3. There are very few ways around Spanish inheritance taxes and these legal ways require careful advance planning. Spanish law provides no large exemption from inheritance tax, such as most countries have when the family home is transferred. The tax is due after the first €16,000. 4. However, if you are an official resident of Spain leaving your property to a spouse or child who is also a resident, you may be eligible for a 95 per cent reduction in the value of the property for inheritance tax calculation. This is not available to non-residents. Limit of €120,000. Spanish Inheritance Laws Restrict Freedom – In order to protect the falily and provide for the children, Spanish inheritance laws restrict the testator's freedom to leave his property to anyone he pleases. It is almost impossible for a Spanish parent to make the classic threat that he will cut the no-good son out of his will. This is because Spanish law requires a parent to leave two-thirds of his estate to his children, even by-passing the surviving spouse. The spouse, however, inherits a lifetime interest in the property and can continue to live in the home. In general, most people wish to provide for their children, so they have no problem in making a Spanish will in accordance with those provisions. If the names of husband and wife figure on the title deed of the property, each has one half of the ownership. Thus when one dies, only half of the Spanish property is transmitted. The living spouse continues to own his or her half, with his or her name on the title deed.
The Mijas Foreigners Department would like to inform you that the information offered in this is meant as a guideline only and could be subjected to changes. This guide can also be found on our web page www.mijas.es and will be updated periodically. April 2005.
Property Purchase Seek Legal Advice – Relying on the goodwill of the property seller or the estate agent is smiple unreasonable, no matter how honest and helpful they are. The saying in property is that the seller may not need a lawyer but the buy always does. Many Spanish lawyers speak English and are familar with the propbles that arise when foreigners purchase property in Spain. His advice can save money and heartache later, should he discover any hidden problems. A lawyer's fees would be about one per cent of the property price Property Sale One of the most important tips a professional estate agent can give you is to help you set a realistic price on your property. Too many property owners today think their Spanish homes will bring a higher price than the market warrants. Keep in mind that, if you are in a hurry, an estate agent will work much harder to sell a property that is reasonably priced. Use a lawyer when you sell. He can help you avoid unpleasant surprises by making sure that your contract protects you and that all legalities are correctly carried out. A lawyer's fee will cost you about one per cent of the total purchase cost and is money well spent. The lawyer can also explain your capital gains tax picture to you. Have him calculate it exactly. National Taxes NIE – Note that you must obtain a NIE, a Spainish tax identification number, for all dealing with Hacienda, known as the Tax Agency. This number is obtained at the National Police Station. They must fill in a form and take a copy of their passports. Why do I need a Spanish bank account? – If you spend prolonged periods in Spain and especially if you own property here, there are many ways a Spanish bank account will help you. You can make national and international transfers of funds and you can hold credit cards and direct debit cards. You have local access to banking services such as standing orders to pay your usual bills, safe-deposit boxes, a chequebook, plus offers on life, home, and automobile insurance, as well as investment products.
The Mijas Foreigners Department would like to inform you that the information offered in this is meant as a guideline only and could be subjected to changes. This guide can also be found on our web page www.mijas.es and will be updated periodically. April 2005.
Daily Life When must I become a resident? – If you spend more than six months physically present in Spain during one calendar year, you are required by law to take out a Spanish residence permit, even if you are an EU citizen. All tourists have the right to stay 90 days with no formalities. This can be extended another 90 days on application. After this six months, all visitors are required to apply for a residence permit or leave the country. NIE – Both residents and non-residents need a NIE. This is the Numero de Identificación de Extranjero, the tax identification reference mumber which identifies the holderto the Spanish Tax Agency and in just about every transaction involving money, such as buying a house or opening a bank account. If you are a non-resident who owns property or intends to buy property, you need a NIE. Spaniards also have tax identification numbers, but theirs is call NIF, the Numero de Identificación Fiscal. They are exactly the same thing, so you enter your NIE where it says NIF on forms in Spanish. If you are applying for a residence permit, you may apply for a NIE at the same time, because the number of your residence card will be your NIE. Or you may previously have obtained a NIE, in which case this goes on your application form. EU Citizen – Work Permit – An EU citizen looking for work may go directly to the INEM, the Instituto Nacional de Empleo, the national employment office and register himself as a job seeker. There are two type of work permits, one for self-employed persons and one for workers employed by others. The self-employed permit is called autónomo and the worker's permit is called cuenta ajena (on another person's account). More information of documents needed can be obtained at the National Police Station. Communities If you live in an apartment block or a garden apartment building, you will be a member of a Spanish Community of Property Owners. This is the "condominium" system by which the individual owners manage the property and assets that they all own together, such as the gardens, hallways and roof of the building, Each owner has the right to vote at the AGM, the Annual General Meeting, which is the suprime authority of the Community. Simply by purchasing your property, you become a member of this Community. Do not confuse a legally constituted Community of Property Owners with a simple neighbours' association. The Community is a body with full legal powers to carry out many type of actions. It can even dissolve itself by selling the building and distributing the money among the owners. You yourself may be elected President and represent the Community in court. In Spanish, the Community is called Comunidad de Propietarios. These communities are regulated by the Ley Horizontal, the Horizontal Law. Only those people who buy a house in a village street or an isolated rural property will not be members of a community. Your Rights and Obligations – As a member of the community of property owners, you have the right to attend the Annual General Meeting, and any other meetings of the community, along with the right to be properly informed in advance of the dates and the order of business of any meeting called. If you are not correctly informed, you can protest and even have the results of the meeting annulled by a court. At the meeting you have the right to voice your opinion, the right to vote, and to present motions for the vote of the other members. You have the right to be elected and to hold office in the community. You may be the president, the vice-president of the secretary. You may be charged with administrating the affairs of the community. You have the right to see all of the documentation and records of the community. The administrator or other officers are legally bound to keep these records and accounts at the disposal of the members. If they refuse to show them to you, you can obtain a court order to see the documents. You have the right to hold and vote proxies issued by other members who are absent from the meeting. This is common practice in communities where the foreign owners are absent much of the time. Most communities in fact hava standard Proxy Form on which an absent member can delegate his vote to another member. If you win the confidence of many members and obtain enough proxy votes, you can run the community to suit yourself. If you feel that a decision voted by the majority of the community is illegal or contrary tothe statutes, you, acting alone, can ask the local court to rule on the matter. If you fell that the decision is legal, but seriously prejudicial to your own interests, and you can unite 25 per cent of the owners and shares, you can petition the court to have the decision annulled, or you can oblige the president to call an Extraordinary General Meeting. You will need skilled legal counsel for either of these actions. You are obligated to pay the cuotas – community fees which have been properly voted by the members at the Annual General Meeting. If you do not pay, the community can claim the debt in court and even have your property sold at auction. You are obligated to abide by the statutes of the community. If these statutes require all owners to paint their properties white and fobid owners to keep dogs, then you must paint your property white and you may not keep a dog. If you violate the statutes, the community member can vote to ask the court to issue an injunction which will forbid you from entering your property for a period of up to two years. This seldom occurs but the threat is there and it has been carried out in a few isolated cases. The Law of Horizontal Property and the statutes of most communities oblige you to maintain your property in good condition so that it does not cause damage to the other owners. You must permit workmen to enter your property when it is necessary for repairs on the building. The Administrator – Because so many details demand the attention of the person who runs a community, most communities choose to name a professional administrator fo this job. The administrator is contracted to manage the services of the community and is paid a regular fee for this service. Although many communities choose to employ a licenced Adminstrador de Fincas, or professional property administrator, or a licenced tax consultant or accountant, the community administrator need not hold any official title. Many people think that the professional administrator is an elected officer of the community. This is not so. He is a hired professional, usually contracted for a period of one year. The community may vote to renew his contract, vary his payment, or name a new administrator at any time if he feels that the administrator is not carrying out the duties specified in his contract. This decision must be submitted to the general meeting for approval, but this can take place after the action. Relations between communities and their professional administrators have caused many problems. The administrator's contract must be very carefully drafted to make sure that both parties know their rights and duties. The administrator's duties are the normal ones of seeing to the proper management of the common elements of the community. Unless otherwise specified in the statutes of a particular community, the horizontal law says that the administrator shall prepare the budget and present it to the meeting, maintain the building, inform the owners of his activities and carry out any other funcion conferred by the general meeting. Many administrators carry out the work of the community effectively and rapidly, doing their best to keep all of the owners satisfied and well informed. They charge a reasonable fee for their services and they present the community members with clear accounts each year at the general meeting. These administrators are treasures. In other cases, members complain that the administrators do not carry out the work for which they are responsible, that they arrage community affairs to suit themselves rather than the members, and that their accounts are vague and confusing, which leads the members to worry about where the money has gone. These administrators should be replaced. Replacing the administrator, like electing the president, is an important step and will require the majority vote of the community members. Annual General Meeting – The Annual General Meeting is the maximum authority of the community of property owners. They are required by law to meet at least once each year to elect a president, to discuss issues affecting the community, to examine and approve the accounts of examine and approve the accounts of expenditures of the previous year. They must decide upon the budget – and the fees each member will pay – for the coming year. The book of minutes, the libro de actas, which records details of the meeting and voting, is an official legal document which can be used in Spanish court proceedings. It must be stamped as authentic by a notary or a judge. This book establishes the right of the community president to bring a lawsuit against a member who has not paid his fees, the cuotas. It should record the names of members who voted in favour of a measure, either in person of by proxy, and the names of those who voted against each measure. This becomes important when a minority of community members wish to bring a legal protest against the decision of the majority, claiming that their interests have been seriously damaged. even though the majority vote was otherwise quite in order. In a court case, the dissenting minority must bring action against the majority. So the minutes book, and decisions made by the commuity are serious matters. Before you attend your first meeting, you should try to meet the president and the administrator of your community, as well as other members, to get an idea of the problems facing the members. If you already have a motion that you want passed by community vote, you can begin to assemble the proxy votes of members who support your position and who will be absent from the meeting. This proxy can be a simple written authorzation that enables you to cast the vote of the absentee. You must make sure that your motion appears in the offical agenda of the meeting. You must be notified at least eight days in advance of the meeting's date, time and place. You should also receive a written agenda, the order of business to be transacted, though this is not strictly necessary. The members can bring up any new business they wish at the meeting. It need not be listed on the agenda. At the meeting, you will register your attendance, and any proxies you will vote, with the secretary or keeper of the minutes book. The president will preside over the meeting. The first item will be the reading and voting to approve the minutes of the previous meeting. If the minutes do not meet with your approval, either because they are false or incomplete, you can vote against accepting them. Your protest will be registered in the book and can serve as evidence in court if you wish to make a claim. The accounts of the previous year's income and expenditures will then be presented for the members' approval. You should have received you copy of these accounts before the meeting. Sometimes they are perfectly clear and other time they are quite incomprehensible. Ask the president, administrator or treasure to explain any points not clear to you. Then discussion will start on proposed plans and expenses for the comming year. Many issues can arise. Perhaps one group wishes to paint the building or to install a swimming pool, but others protest that this will raise the fees too high. Tempers can run high at community meetings. They sometimes degenerate into multilingual shouting matches when not properly managed. Even the best of circumstances, meeting tend to be longwinded, as different members insist on discussing minor details. One community voted unanimously to limit each member's speaking time to five minutes, and to limit each member to two speeches. When it is time to vote, you will vote according to your cuota, or community share. This cuota, based on the size of your property, determines both your share of community fees and the weight of your vote. The Law of Horizontal Property establishes a double standard for weighting votes. It states that a majority of members must also be a majority of cuotas. Usually, the majority of members is also the majority of the cuotas, but sometimes a few members with large properties can dominate the workings of a community. This can happen on an urbanisation where the developer still controls the votes of the unsold parcels of land and runs the community to suit himself. If it happens that a few owners with a majority of cuotas come into conflict with a greater number of owners with a minority of cuatas, a court decide the final outcome. The votes of the members will be recorded in the minutes book and action will be taken accordingly. A new president will be elected by majority vote and the building will be painted or not, according to the majority decision. There is always the possibility of protest, remember, when a minority of members feel they have been pushed around by the majority. If a decision requires a unanimous vote, such as a change in the statutes or a construction project which will alter the participation shares of the community members, this unanimity can be achieved by informing an absent members of the decision. If they do not respond negatively within one month the motion is considered as passed unanimously. One recent amendment to the horizontal law provides that the installation of ramps and other facilies for the hadicapped requires only a three-fifths majority, even when such an alteration of the building would normally need a unanimous vote. This does not exactly give the handicapped a free rein, but it does improve their negotiating poition. The new law came from a court case in which one person in a building had blocked the installation of ramps. This was perfectly legal although not ver nice, and the Spanish Congress voted to amend the law. Finally the meeting will be adjourned, with some members pleased and others not pleased at all. This is truly democracy in action, with all its advantages and disadvantages. When people are unhappy with their community, they always refer to it as "they". The community is never "they". It is always "We".
The Mijas Foreigners Department would like to inform you that the information offered in this is meant as a guideline only and could be subjected to changes. This guide can also be found on our web page www.mijas.es and will be updated periodically. April 2005.
Driving Licences, Vehicles, – Procedures at Tracico If you are an official resident of Spain, you may not operate a vehicle on foregn plates or on tourist registration, whether you are an EU or non-EU citizen. You must have full Spanish registration on your vehicle. As a resident you have two choice. First, you can import you presently owned car when you take up residence in Spain, paying Spanish special registration tax of 12%. This 12% is charged on the reduced value of older cars, so vehicles five years old will be taxed at only 50% of their new value, and cars 10 years old are rated at only 20 per cent of their original price. Or you can purchase a car on the Spanish market, paying Spain's IVA of 16% plus the special tax of 12%. This tax is reduced to 7% for smaller cars. With one exception, an official resident of Spain must also have a Spanish driving licence. You can easily exchange your present EU driving licence to a Spanish permit. At this time, most citizens of non-EU countries find they cannot exchange their licences for Spanish permits and are forced to take the Spanish driving exam. It is possible to take the written test in English and other languages. For EU citizens, it is also possible to continue using their original home-country licence, but it is necessary to present the licence at the Traffic Department in Málaga in order to have it inscribed in the Spanish list of drivers and stamped. Without the stamp, it is not valid. Compulsory documentation
to carry in the car: – In order to be valid, photocopies of these documents must be stamped (compulsado) by the Traffic Department. Otherwise, the originals must be carried and shown to the police. In addition to these documents, the car must carry two red triangles and a reflective vest, which the driver must wear if he gets out of the stopped vehicle at night or in poor visibility. The Spanish system authorises three types of educational establishments. These are public shools, private schools partially funded by the State (centros concertados) and fully private schools. The State guarantees a place in Public Education at any level. Obligatory Education Non-Obligatory
Education Steps to Follow for School Registration – Application period: From 1 to 31 of March at the School nearest the family home, for new students and those bringing their school records from a different shool. As these dates approach, it is advisable to obtain full information. If action is taken within the time limits, almost any problem can be solved. Once the school has been selected, the parent should obtain the application forms and fill them in, presenting the following documentation: Certificado de empadronamiento – This is obtained at the Town Hall and shows that the family is registered as living in the municipality, Passports, Vaccination certificates, previous years tax declaration. In case there are not sufficient places to meet the demand, the Matriculation Commission will establish a system of points rating rating each application in the following areas: proximity of residence, brothers or sisters already attending the school, family income, disability of the student of a parent, chronic illness, unusually large family, and academic record, although this only applies to baccalaureate or middle grade trade schooling. Before 12 April, a list of applicants and the points assigned to them will be posted on the notice board of each school. If a parent feels his child's rating is incorrect, he can present an appeal from within 10 working days. The final list of admissions will be posted on the notice board of each school before May 7.
The Mijas Foreigners Department would like to inform you that the information offered in this is meant as a guideline only and could be subjected to changes. This guide can also be found on our web page www.mijas.es and will be updated periodically. April 2005.
Town Hall – How does it work? The Town Hall has three administrative divisions, and each one is supervised by a civil servant of national rank. That is, the State assigns to the Town Hall three national career Civil Servants to oversee the proper local administration. The three areas are Administration, Accounting and Treasury. In Spanish they are Secretaría, Intervención and Tesorería. Secretaría: This carries out all administrative procedures, including the registry, admission and custody of documents, the Minutes Book of the Town Council meetings, the census and electoral rolls, decrees, building and building and business licences, correspondence and other areas. The departments are called Negociados. They include Urban Planning, Use of the Public Way, Industry, Registry of Inhabitants, Municipal Assets and others. Intervención: The Accounting department draws up and manages the Municipal Budget, to meet the needs of the various agencies. The budget includes running expenses, such as salaries, lighting, office material and so on. Capital investments include new buildings, purchase of vehicles, parks, sports, sports installations and others. The budget expenses must match the town's income. The Town Hall receives income from fees and licences, transfers from the central State government and from the Andalusian regional government, and it may also borrow money. The principal source of municipal income is the Town Hass's own resources, which come primarily from these areas: Taxes: Annual municipal tax on real estate. This is the IBI, (Impuesto sobre Bienes Inmuebles), charged each year on properties. Building licences are another important source of income, along with the annual tax on vehicle ownership. Fees: Fees for rubbish collection, drains and other services may not exceed the cost of the service provided. The Accounting department controls the income and expenses but it does not collect the money. This task falls to the Treasury. Tesorería: The Treasury department collects funds from taxes and fees, it holds the municipal assets and it makes payments to cover the Municipal Budget. If the taxpayer pays during the voluntary payment period, he has the benifit of discounts for prompt payment. If not, there will be a surcharge of 20 percent and even a court order to garnishee the non-payer's bank account. Property can be seized and sold at auction to satisfy a municipal debt. The Treasury also pays the Town Hall's bills, always under the supervision of the Accounting Department, which controls the Budget. Taxes and Fees – Impuesto Sobre Bienes Inmuebles – Real Estate Tax – IBI The annual real
estate tax, called by British the rates, is known is Spain as the IBI,
Impuesto sobre Bienes Inmuebles. When you buya property, come to the Town Hall as soon as you have your deeds (escritura) registered at the Property Registry. Change the name from the previous owner to yours on all your Town Hall bills. You need photocopies of the deeds, the previous year's rates receipt and your NIE number. The name will be changed for the next calender year. Once you have changed the name in your rates (IBI tax) receipt, the rubbish colloction will be changed automatically. Basura
Y Residuos Solidos – Rubbish and Recycling Fee – Agua
– Water Impuesto
de Circulación – Municipal Road Tax – Road Tax Fees
2005 Under 8 – 16.41 Euro From 8 to 11.99 – 44.31 Euro From 12 to 15.99 – 93.54 Euro From 16 to 19.99 – 116.48 Euro More than 20 – 145.60 Euro Motorbikes Under 125 c.c. – 5.73 Euro From 125 to 250 c.c. – 9.84 Euro From 250 to 500 c.c. – 19.70 Euro From 500 to 1.000 c.c. – 39.39 Euro More than 1.000 c.c. – 78.78 Euro How to Pay Be advised that Spanish administrative law does not require the Town Hall to send out notification of bills. The responsibility is entirely on the taxpayer to know his debts and pay them punctually. Nevertheless, the Town Hall has initiated a programme of notifications sent through the post. If the notification you receive is not in your own name, contact the Foreigner's Department of the tax collection counter at the Town Hall to make sure you are paying the correct bill. All bills of course may be directly paid at the Town Hall. Once you are sure that your rubbish and IBI and other charges are correctly listed, you may set up a direct debit order at your bank. This will be effective as of the following calendar year. If you already have a direct debit debit with your bank, you do not receive any notification from the Town Hall and you must keep your bank statement as justification of payment. Voluntary Payment Period The voluntary period for payment of local taxes and fees may vary slightly from one year to another but it is usually begins some time in March / April and always ends on the 20th of November. Prompt payment benifits from discounts. All payments made after the 20th of November will have a 20% surcharge. Bankers orders can be filled in any of the Municipal Offices. This is the most comfortable way to pay your taxes as they will be sent to your bank with the maximum discount always. Urban Planning and Technical Departments (Urbanismo – Oficina Tecnica) These departments are very important as it is where you have to go to receive your building permits. Any building whether it be changing your bathroom tiles or building a complete house needs a licence. The first thing you should do is visit the Technical Office and explain the work that you would like to carryout and they will advise if it is possible of not and what type of licence you need to apply for. There are two types: one for minor works such as changing tiles, windows painting etc... and another for major work that needs a project stamped by the school of architects in Malaga. Anthing that involves structure will need a project. This has to be applied for when the major work has been completed in order for you to contract the electricty, water, and include the building in your title deeds. The charge for this is 10% fo the original 1.8% fee that was paid when applying for the licence.
The Mijas Foreigners Department would like to inform you that the information offered in this is meant as a guideline only and could be subjected to changes. This guide can also be found on our web page www.mijas.es and will be updated periodically. April 2005.
UK
State Pension April 2007 – Are you up-to-date? A UK State Pension
is available to any person, irrespective of nationality, who has been
resident in the UK for a continuous period of 3 years and has contributed
to the UK National Insurance scheme. In order to obtain a full State
Pension it is necessary to contribute for 44 years for men and 39 years
for women. A single person's annual pension is £4,200 per year
and a married couple's pension is in excess of £6,500 per year. In order to bring
your State Pension up to date it is necessary to obtain a forecast and
it is useful to have available your National Insurance number which
is comprised of two letters followed by six numbers and one letter.
Should you have this then steps can be taken to obtain it. The typical UK expatriate
living on the Costa del Sol will have worked earlier in the UK and have
already built up a considerable number of years of contributions to
the UK system. However, upon leaving the UK and arriving in Spain most
expatriates will give no further thought to their UK pension until possibly
they realise that they are approaching 65 years of age. The UK system
currently allows you to catch up all the years subsequent to 1996 at
an average cost of £375 per year. With interest rates still relatively
low it can be seen that this represents an extremely attractive investment.
In fact the additional pension obtained each year from the age of 65
is the equivalent to a return of 30% on the money spent improving your
pension. For those expatriates working officially abroad and contributing
to the Spanish Social Security system there are even more attractive
contribution rates which translate into a return on your money in excess
of 50%. The following
points are also of interest:- 1. In order to receive
a payment of £6,000 per year on retirement by way of an annuity
it is necessary to build up a pension fund of £100,000. The State
Pension contributions are negligible when compared to this. 2. It is possible
to receive a UK State Pension as well as a Spanish pension. 3. Should your pension
record not reach the minimum number of years necessary to receive a
payment at 65 years of age (11 years in the case of the UK and 15 years
for Spain) then the EU allows contributions to be grouped together to
arrive at a pension which might not otherwise be payable. 4. Between 2010
and 2020 the pension age for women will rise from 60 to 65 years of
age. 5. The amount of
the married couple's pension is arrived at by the wife receiving 60%
of her husband's single person's pension. From 2010 the husband can
also claim 60% of his wife's pension and this will apply when his own
contribution record produces a smaller payment. 6. The amount of
240 euros paid monthly by 'autonomos' into the Spanish system is very
expensive when compared to the one-off annual payments for the UK system. 7. There is currently
a bill proceeding through the UK parliament which will reduce to 30
years the annual contributions necessary to receive a full UK State
Pension. 8. While a retirement
pension may not be a priority at a certain stage of your life, it can
be very easily overlooked and if you are not careful, completely forgotten.
The UK State Pension may not represent a fortune but it can be obtained
at very attractive contribution rates for those living abroad. Pensions
may be dull and boring but they will never be as dull and boring as
poverty can be in old age. Should
you require assistance in bringing your UK state pension up to date
then please contact: Peter Sanderson BA MSc ACMA MIL
David
Searl - Writer - You and the Law in Spain.
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