Retiring in Spain: Pensions, Social Security & Tax Treaties

Spain has become a natural choice for retirees from the United Kingdom, the United States, Canada and across northern Europe. The climate, lifestyle and healthcare system are major attractions – but so too is the ability to receive pensions and social security income while living here. This guide focuses on how state pensions, private retirement accounts and double taxation treaties work in practice when you retire to Spain.

For a broader overview of budgets and everyday running costs, see our Cost of Living guide for the Costa del Sol.

Receiving State Pensions While Living in Spain

Spain has social security coordination agreements and tax treaties in place with the United States, the United Kingdom and Canada. In practical terms, this means retirees can usually receive their state pension or social security income while resident in Spain, paid either into a home-country bank account or directly into a Spanish bank.

U.S. retirees — Social Security benefits

American retirees can continue to receive U.S. Social Security benefits while living in Spain. Payments are generally made in the usual way, with the option to:

• Keep deposits going to a U.S. bank account, or
• Arrange direct deposit into a Spanish bank account in euros.

It is important to inform the Social Security Administration of your new address and banking details when you relocate, and to keep this information updated to avoid interruptions in payment.

UK retirees — UK State Pension

UK citizens living in Spain can claim their UK State Pension as normal. Under the UK–EU Withdrawal Agreement, pensions for eligible UK retirees in Spain continue to be uprated annually – in other words, your State Pension increases each year as if you were still living in the UK.

The pension can be paid into a UK bank account or, if preferred, converted and paid directly into a Spanish account. Staying on top of address and banking changes with the Department for Work and Pensions (DWP) helps ensure smooth, uninterrupted payments.

Canadian retirees — OAS & CPP

Canadian retirees can receive both Old Age Security (OAS) and Canada Pension Plan (CPP) benefits while living in Spain. As with other countries, payments can usually be made:

• Into a Canadian bank account, or
• Directly into a Spanish bank account, converted into euros.

Service Canada should be notified of any changes in residency status, address or banking details. This reduces the risk of delayed payments or compliance queries once you have settled in Spain.

Private Pensions & Retirement Accounts

Most international retirees also draw income from workplace pensions, personal pensions or tax-advantaged retirement accounts. These can generally be accessed while you are resident in Spain, but the tax treatment may change once you become Spanish tax resident.

Americans — 401(k), IRA & private pensions

U.S. citizens can usually continue to access distributions from:

• 401(k) and other employer-sponsored plans
• Traditional and Roth IRAs
• Private or company pension schemes

However, how those withdrawals are taxed can differ between the U.S. and Spain. Coordination between a U.S. tax advisor and a Spanish advisor familiar with the U.S.–Spain tax treaty is strongly recommended, especially if you hold Roth accounts or significant investment income.

Britons — workplace pensions, SIPPs & QROPS

UK retirees in Spain often rely on a mix of:

• Workplace or company pensions
• Personal pensions and SIPPs
• Defined benefit (final salary) schemes

Some choose to transfer their UK pension into a QROPS (Qualifying Recognised Overseas Pension Scheme) for simplified management when living abroad. Whether a QROPS is appropriate depends on factors such as your age, pension size, scheme rules, fees and future plans.

A specialist adviser can help you compare leaving pensions in the UK with consolidating or transferring them, taking into account Spanish tax rules and the wider tax picture for owning assets in Spain.

Canadians — RRSP, RRIF & employer pensions

Canadians in Spain commonly draw retirement income from:

• Registered Retirement Savings Plans (RRSPs)
• Registered Retirement Income Funds (RRIFs)
• Employer or defined benefit pension plans

Withdrawals are often taxable in both Spain and Canada in theory, but the Canada–Spain tax treaty determines where income is primarily taxed and what credits may apply. Careful timing of withdrawals, and deciding which account to draw from first, can make a meaningful difference over the long term.

Double Taxation Treaties: Not Being Taxed Twice

Spain has Double Taxation Treaties (DTTs) with the United States, the United Kingdom and Canada. These treaties are designed to ensure that the same income is not fully taxed twice in both countries, even though you may need to submit tax returns in each jurisdiction.

In practice, this usually means:

• Spain or your home country is given primary taxing rights over certain types of income (for example, pensions, dividends or employment income).
• Any tax paid in one country can often be credited against tax due in the other.
• The exact outcome depends on the treaty, your residency status and your income mix.

Because treaty provisions are technical, most retirees benefit from working with an international tax advisor who understands both Spanish law and the rules in your home country. This is particularly important if you have income from multiple sources (pensions, rentals, investments) or plan to spend time in more than one country each year.

A good starting point is to understand when you will become tax resident in Spain and what that means in terms of global income reporting. Our Buyer’s Guide for Benahavís and Residency & NIE essentials give a practical overview of timelines and documentation.

Putting It All Together: A Simple Retirement Planning Checklist

While each situation is unique, most retirees from the U.S., UK and Canada follow a similar planning sequence:

• Confirm which state pensions and private pensions you are entitled to, and how they will be paid once you live in Spain.
• Discuss withdrawal strategies from 401(k)/IRA, UK pensions, RRSP/RRIF and similar accounts with a cross-border advisor.
• Clarify when you will become Spanish tax resident and how double taxation treaties apply to your income.
• Review your visa route – for example, using the post–Golden Visa options such as the Non-Lucrative or Digital Nomad visas.
• Build a retirement budget that includes running costs, taxes, healthcare and lifestyle spending.

Our dedicated Buyer’s Checklist is a helpful companion here, covering everything from early research to completion day and key handover.

With the right structure in place, you can enjoy the benefits of retiring in Spain – from long lunches and sea views to a lower cost of living – while keeping your pension income and tax position predictable.

Related Resources for Retiring in Spain