Retiring in Spain


With economic uncertainties of the past years, may have pushed those dreams aside. Rather than thinking about “where” you might retire, you may be wondering “when” or even “if” you will be able to retire at all. We know there’s a place out there that’s just right for you… and it’s closer to home and easier than ever to make it your reality. Don’t you worry! We will help you by guiding you to find the answers to the “Where” and “How”! You can fix yourself the answer to When?

Thinking in that you probably worked hard and saved money for many, many years, and that these will be the best years of your lives, when you will not have to bother about working or about having time to do those things you always wanted, but thinking also that you will not receive wages, so that your pensions and savings will have to be sufficient to have a pleasant and comfortable life during the next 20 years that statistically people can expect to live during their retirement……you better have a Good Plan!

Welcome to Spain and its Costa del Sol: “The European Retirement Paradise”. Which leads without a rival as the most popular destination in Europe to buy, rent, investing in real estate and also to get retired. Why?

Well, the answer to this question has already been widely developed throughout different pages on our web site, but to summarize some of reasons: Because of its proximity to the rest of Europe, its fantastic climate, its first-class medical facilities and doctors, its lower living costs where your pension stretches further than almost anywhere else in Europe, its slower pace of life, its very cosmopolitan social life with more than 154 nationalities, its life expectancy, its excellent infrastructure, international schools, and a long list of other reasons that you could add...

In general Costa del Sol offers you a retirement that combines First-World European luxuries, with charms of the sun, beaches, and a never-ending list of other good reasons, which will make you understand that you will sacrifice nothing when it comes to quality, comfort, and safety.

From Holiday Dreams and with the help and experience of our experts, we will help you, to build your own Retiring Moving Tailored Plan, through our action plan that will help you to clarify all of your doubts, and that will let you know what you should do at all times. All the tools and insights you need are here, in one place, to help you find your retirement paradise. Live your dreams!

Relax and take your time to read about your “Action Plan” as a retired:

1. Plan Your Economy

The people who adapt most successfully to life here have done a lot of planning. Having said this, many retirees make the mistake of abandoning their long-term strategy completely once they retire. Bearing in mind that you need to plan for 20+ years ahead, a long-term approach is still very relevant. To get the balance right, you need to sit down with a financial adviser, one familiar with both Spain and the UK, to examine your needs and current investment strategy and determine the best way forward for you, so you may need to move some of your wealth into investments designed for short-term needs.

CalculousYour goal during your retirement is to maintain your financial independence for your entire life time. This means that inflation is your enemy, and your investment strategy should be designed to at least outpace inflation, if not continue to build your nest egg. Inflation can easily erode the spending power of your capital, even if you are earning interest.

We recommend holding a well diversified portfolio, possibly including equities, bonds, property and cash. This should be structured to your income and capital growth requirements.

Most people still need an estimated financial budget during retirement. Estimate your monthly expenses based on the lifestyle you plan to live. The rule of thumb for people wishing to continue living their pre-retirement lifestyle is to estimate at 80% of your current expenses. This is based on the fact that you’ll no longer have work related expenses such as commuting, lunches, dry cleaning, work clothes etc.

However many people actually spend more money in retirement than they do whilst working, for example, if they travel, play golf etc. On top of this, a move to Spain will mean different and new expenses so it will be necessary to sit down, study the Spanish costs of living and work out a new budget. Allow for extra “hidden costs” associated with settling in over the first couple of years, and don’t forget to include medical insurance and a reserve for emergencies. Also, although on average a 65-year old retiree will live another 20 years, others live much more than this so take this possibility into account as well.

If you calculate that your money may not support the lifestyle you have chosen, you will need to make adjustments. You may wish to make adjustments in any case to improve your standard of living in Spain.

2. What Lifestyle do you want to have?

The first question we should answer ourselves is this. Surely the life people has led so far will not be anything like the life that will take from now on, even if it would be in their own country, but much more, when living abroad.

We recommend you to take all the time you need to think, talk and decide jointly, as this is usually a set plan, which affects other people. Let us help you to answer all the questions you may have to clarify to help yourself to make a decision about the environment will suit you best. Living in a mountain village? On a farm in the countryside? In a coastal town? Or in a big city? This question should be clear before coming to the next point.

3. Finding the Right Area

You need to do a visualization exercise of the type of life you want to lead during your retirement, so that thanks to our experience and knowledge we can advise you on the different areas that can provide that kind of life. Of course, it goes without saying that your requirements will have to adjust to each single budget, and "in general one must be ready to compromise".

This part of the "Action Plan" is vital, because the people who make the decision to buy should reach an agreement in what are the requirements that not negotiable, and which ones are possible to sacrifice if there is no choice, to be able to get the property that is closer to your needs and tastes.

This information will be vital to know that we are working in the right direction. Not taking seriously this point, would affect badly to the result from our work, and would produce to you many frustrations and disappointments, and sincerely this is something we want to avoid.

Believe us when we say that not getting out of the "Holiday Dream’s Action Plan", is your guarantee of having a smooth and enjoyable time in finding your future "Dream Home", where you will enjoy of your best years of happiness during your retirement.

4. Finding The Right Property

With our knowledge of the Costa del Sol we can help you to find the right property, whether you are looking for something simple or luxurious, on the beach line or by a golf course, as a holiday home, as residency or as an investment, we will get sure that you will find your “Dream Home”.

At this point is when it's time to focus on the viewings, to check if satisfy the maximum number of requirements you are looking for, of course, within reality. It's not possible to find what does not exist!

Having talked many times about all aspects of importance to assist you in finding your future home, and having a very clear picture for both parties, we will get sure that you visit the best properties that the market can offer, given your requirements and budget.

It will be extremely important that you share your opinion of the different properties you visit with your personal agent, so that if necessary, he/she will be able to right the ship in the right direction. Also, take notice of the information that your agent is giving you. Such information might be of your interest, and you should take it into account in order to compare the pluses and minuses of each property, so you can start eliminating properties from your favorite list.

You may sometimes be shown some property, which hasn't the general characteristics you asked for. We do this for your sake, and attending to the information received from you during the viewings, when we think that the property in question might be a good option.

Pretty often, the client end up buying a property type that in principle had not applied for, because they get surprised with a property that is better than what they could have expected. Buying a property is not always easy, until you have it in front of you, and then you are 100% sure!

Holiday Dreams offer to its clients a tailor-made property finding service, based upon their chosen requirements and from a date of base of over 20.000 properties, through our MLS (Multi Listing System). In practice it means that we have access to almost all existing properties along the Costa del Sol, because we are networked with the majority of real estate companies on the coast through ours members clubs.

Although you have no possibility to view all of them directly on our website, we can provide you all the information and show you any property you could find on internet, through its reference number and the name of the agency where found it.

We pride ourselves on our individual approach and attention to detail. We promise that we will not waste your time – we will only introduce you to a property that we believe you may be interested to buy.

5. Find a Trustworthy Legal Advice

Having found your "Dream Home", you have already traveled most of the way. But the next step is the last one for having a nice experience with purchase of your "Spanish Dream".

LawSure you have heard of many cases in the media (especially in the British), related to buying property in Spain which sound as real nightmares, but most of them have to do with cases where the customer jumped from what we call "The Action Plan", in some point of the buying process.

Many of these cases are related to not having used a reputable lawyer at the time of purchase, by wanting save a few hundred Euros.

Believe me, this is not the kind of occasion should seek to save a few Euros. Choosing a good lawyer is a measure that should not be treated lightly. Holiday Dreams will put you in contact with some of the law firms that enjoy high reputation, if you do not have already one.

6. Pension Planning

Nowadays there are quite a few choices on how to receive your pension. Depending on the type of pension and whether you have started drawing income, there may be ways to improve your pension fund and earn more from it. A pension’s expert will be able to point you in the right direction.

Remember that you will need to take the Spanish rules into consideration, as these are different, so it is essential to take advice from an adviser conversant with both UK and Spanish pension and tax rules.

If you are retiring to Spain, collecting your pension is an extremely straightforward process. It can be paid directly into your Spanish bank account in Euros, for free. You can even claim your pension online.

Things to remember when you retire to Spain:

  • Contact the International Pension Centre, HM Revenue & Customs’ National Insurance Contributions Office, andPlaning Your Retirement your local tax office before you leave your country.
  • If you have ever worked in Spain (or any other EU country for that matter) contact the local government where you paid tax – this will be taken into account when calculating your pension.
  • Will you be retiring permanently to Spain? If so, then you will be classed as a non-UK resident, and this has tax implications. See our Legal Stuff pages for information about tax implications here or contact the tax office to find out more, and do it properly.
  • As a recipient of pension in an European country, generally you are automatically entitled to free access to healthcare.
  • Everyone has different needs and circumstances, so ask your financial adviser for advice on the right investment mix for you.

Don’t shelve your retirement dreams. Instead, use this guide to put your dreams into action.

7. Post-Moving Service

We are at the point where it has already finished the whole process of home buying, and you are the new official and happy owners of your home in Spain.

From here, there are many other things that should be taken into account, so they will not lead to unpleasant surprises in the future.

Use Our ServicesSince Spain, despite being improving all the time, especially with the incorporation of i-technology, it is not known for having a good bureaucratic administration, from Holiday Dreams we suggest you to contact one of the many administrative agencies "Gestorías" where they will help you with every single procedure need to, and for very little money.

In Spain, the system is extremely bureaucratic and cumbersome, and wanting to do many of these procedures by yourself, especially with the language's complication, can be very frustrating. We think it is better for you to spend your time enjoying your new life as pensioners in this wonderful "Under the Sun Paradise", and pay someone little money for your release of this heavy paperwork.

Moreover, from Holiday Dreams we want to point the importance of having a soft landing, because if by the time you arrive to any country, you start having problems and feeling frustration, your feelings to the country are going to start becoming more and more negative, and those feelings will not allow you to be happy and to really enjoy of your marvelous new lives. Anyway, most of these procedures are necessary once in life ... So you decide whether it's worth it or not!

Like examples, these can be some of the multiple services that you are going to need when you move into Spain:

Organize electricity, water and gas suppliers, sorting out an internet connection and telephone line, arranging different kind of insurances, re-registering your car. If you bring your car over, you need to get Spanish plates a.s.a.p. This is not a simple process - there something like 8 different stages involved - and still this is much cheaper than buying a new car.

Residency Certificate

Once you have lived in Spain for 90 days you must get your residency certificate at the Office for Foreigners (residency cards with ID photo are no longer issued). This doesn't affect any of your rights as an European national, but it is a legal requirement and there are numerous benefits.

Registering on the Town's Census

It is a legal requirement once you are living in Spain to register at the local Town Hall. The "Certificado de Empadronamiento" cost just some Euros, and brings many benefits both, you and to your new community. The certificate should be renewed every two years.


You should register with your local health center as soon as possible. EU nationals can get free healthcare for 6 months after arriving in Spain with an EHIC card. However this is really intended for visitors to the country, and you need a Spanish social security number once you become a permanent resident.

If you receive an European State Pension you are entitled to free healthcare in Spain, and if you are under state retirement age and you paid National Insurance contributions in an EU country, you can get free healthcare for up to two years. For married couples, if only one of you gets a EU Estate Pension the other can get free healthcare as a dependant.

Registering at the Tax Office

As soon as you live for more than 183 days a year in Spain you should become "Permanent Resident" in Spain, and need to register for tax purposes. If you own property, receive interest from savings, or receive income from pensions or property rentals anywhere in the world, you will need to make a tax declaration each year in Spain, between 1st of May and 30th of June for the previous calendar year.

Even if your income is too low to qualify for paying tax, it is still necessary to register and submit a return in your first full year of residency.

Changing your Driving License

Although EU photo-licenses are valid in Spain, once you are a resident it is advisable to change it for a Spanish one because once it expires, or if it is lost or stolen, the DVLA won't replace it. They will give you a temporary license while you are waiting for the new one to come through; if you are planning to hire a car outside Spain in the next few weeks make sure they give you one that is acceptable to car hire companies.


In Spain you don't have to register with a particular dentist. Personal recommendation is probably your best bet when choosing one. Prices are generally lower than in any other EU country.


You can set up a Spanish bank account with just your passport as ID; you don't need to wait for an NIE or Resident Card. Spanish banks often have high charges (probably because they post you a statement every time you make a transaction); it is not uncommon to be charged for depositing money into your own account, if is not in cash! However they are much less impersonal than UK banks and you will soon get to know your bank manager by name. A “Caja”, is the equivalent to a building society - they offer the same services as banks but their profits go towards social projects.

BankingIf you open a Spanish bank account while still living in another country, it will be a non-resident account. Once you are resident here, by law you must change it to a residents' account. Any interest accrued on savings accounts will have the tax withheld (currently 21%).

Watch out for ATM charges; there are three main networks, 4B, ServiRed and Euro6000. If you try to get money out of an ATM from a different network to your own bank, you can get stung for 3% commission or even higher.

If your pension is being paid in other currency into another European bank you can use a specialist foreign exchange company to move your money over to Spain, either by monthly direct debit or on demand. Although banks with branches in both the countries, offer you "free" transfers from one country to another if you maintain both your accounts with them, the exchange rate is considerably lower than the one of your National Bank.

EU State Pensions can now be paid directly into a Spanish bank at a good exchange rate. It is paid monthly in arrears.

Cash is very much the norm in rural areas. Many shops and some inland restaurants do not take credit cards.

Banking hours are normally 8 am till 2 pm Mondays to Fridays.

Our intention in Holiday Dreams is protect you by referring you to all kind of reputed firms, that we have been working with and that we can guarantee as good professionals.