Here’s what you need to know if you’re thinking about retiring abroad
As retirement edges closer, it’s normal to think about what life will look like when you stop working.
Going on more holidays is often high on people’s priorities. You might even have thought about relocating somewhere with a warmer climate when you retire and it’s something that lots of USS members have done. Or it could simply be because you are returning home after relocating to the UK to work.
How one member is enjoying retirement in Spain
We spoke to USS member Elena, who moved from England to Spain, last year, to find out how life is overseas, and what you need to consider when taking your pension abroad.
Elena and her husband, Simon, have moved to Northern Spain where the sun shines for 280 days a year. They’re enjoying their mountain micro-climate and the convenience of being just an hour’s drive from the ski resort Valdelinares.
According to Elena, taking her pension in Spain was relatively simple, she chose to keep her British bank account and have her pension paid into that and then transfer it into her Euro bank account in Spain.
Things to consider when retiring abroad
If you decide not to keep a UK bank account, you will need to consider using an overseas payment service, such as the one we use offered by Citibank called the Worldlink Payment Services*, so your pension can be delivered straight to an overseas bank account.
However, depending on where you retire, not having a UK bank account can cause issues as there are restrictions relating to certain countries.
Another thing you need to consider when retiring abroad is the tax implications. The country you’d be living in will likely have different pension tax rules to those in the UK.
If you become a non-UK tax resident, your UK pension will generally be taxed according to the double taxation agreement between the UK and the country where you are a tax-resident. Where the pension is subject to tax in both jurisdictions, you may be able to claim relief (such as a tax credit) in your country of residence to avoid being taxed twice.
You can find more information by searching double taxation agreements on the government website.
In Spain, the Spanish tax rules mean that the tax liability can be higher for pensioners, Elena however points out that the living costs are often lower.
Elena said: “We’re paying less than half for our energy bills than in the UK because the government caps the limit in Spain. We are also planning to install solar panels and mini wind turbines, which will result in our monthly bill being less than €50.”
When Elena took her USS pension, she took no lump sum, instead taking her maximum pension income. In Spain, if you take a lump sum from your pension, it’s taxable, unlike the UK where you can usually draw down up to 25% of your pension as a lump sum without paying income tax.
So, there’s a number of things to consider when moving abroad from the tax implications, to how you access your money, however typically your USS pension is flexible, and you can access your benefits relatively easily whatever you decide.
You can find out more about retiring overseas on our working or retiring overseas page.
Please note, the contributor in this article is not a pension, financial or tax expert and is speaking about their own personal experiences. Planning for your own retirement abroad may mean you’ll need to take tailored expert advice and potentially, advice on visa and residency rules.
Visit our guidance and financial advice page for more information on how to do so.
*Other banks may operate a similar service for processing overseas pension payments, and it may therefore be advisable for you to make your own enquiries regarding this possibility.
Published: 19 May 2026