The financial eye is very much on pensions this month, both in the UK and abroad, so we will be taking a look at some recent changes featured in the news.
01What Changes to the State Pension Triple Lock Could Mean for British Expats
The UK government has announced plans to change the way the State Pension is increased after 2030, raising questions for British retirees both at home and overseas.
At present, the State Pension is protected by the “triple lock”. This means that the basic State Pension and new State Pension normally rise each year by whichever is highest: inflation, average earnings growth or 2.5%.
The government has said the existing system will remain in place throughout the current Parliament. From April 2030, however, the guarantee is due to change. State Pensions would continue to rise by at least inflation or 2.5%, while an additional safeguard is intended to prevent the pension losing its value relative to average earnings over the longer term. Headlines that proclaim the removal of the triple lock are misleading: money expert Martin Lewis has explained that the changes will remove the ratchet effect relative to earnings, not the triple lock itself.
For British pensioners living abroad, however, there is an important complication. As Expat Focus has highlighted on several occasions, many expatriates do not currently receive annual State Pension increases at all. If you live in the European Economic Area, Gibraltar or Switzerland, you will continue to receive annual increases. Uprating also applies in a number of countries that have relevant social-security agreements with the UK.
However, pensioners living in countries where no uprating arrangement applies, such as Canada, receive what is commonly called a “frozen pension”. Their UK State Pension generally remains at the rate payable when they first became entitled to it abroad, or when they moved to that country. If they later return to live in the UK, it is increased to the current applicable rate.
This means that any future change to the triple lock will have very different consequences depending on an expatriate’s country of residence. If you are a British retiree in Spain, France or another EEA country, your pension will be directly affected by changes to the annual uprating formula. Someone whose pension is frozen overseas is already excluded from those annual increases and therefore would not benefit from either the present triple lock or its proposed replacement while remaining resident there.
02British Retirees in Spain Face Growing Financial Pressure
British pensioners living in Spain are, however, already coming under increasing financial pressure as higher living costs and currency fluctuations reduce the value of retirement incomes. The problem is being felt in Mallorca and elsewhere in Spain, particularly by people who moved abroad many years ago when everyday expenses were considerably lower. Some long-term British residents have reportedly decided to sell their Spanish homes and return to the UK as their finances become increasingly stretched.
The difficulties come against a wider backdrop of rising pensioner poverty. Research cited by the Majorca Daily Bulletin suggests that pensioner poverty has been increasing since reaching a low point in 2013/14, with single pensioners particularly vulnerable. Poverty rates among pensioners living alone are now almost twice those among retired couples.
The amount of your pension received in euros will naturally be affected by movements in the exchange rate, while local increases in food, housing, energy and other costs can further erode spending power. This is sometimes described as ‘personal inflation’ rather than headline inflation.
Private pensions can normally still be drawn while living abroad, although retirees need to take account of exchange-rate movements and the tax rules applying in both countries. Transferring a UK pension to an overseas pension scheme can also have significant tax consequences, so professional advice may be advisable before making such a move.
Overall, the figures highlight the importance of allowing for changing living costs and exchange rates when planning a long-term retirement overseas. A budget that appeared comfortable when you first moved to Spain may provide considerably less security many years later.
03Spain Introduces Housing Tax Measures Affecting Empty Homes
In addition, British expats who own property in Spain should be aware of rules allowing higher local property taxes on homes left empty for long periods. IBI (Impuesto sobre Bienes Inmuebles), Spain’s equivalent of council tax, is calculated using the property’s official value and the rate set by the local municipality.
Under rules introduced in 2023, local authorities can apply an IBI surcharge of up to 50% to homes left unjustifiably empty for more than two years, generally where the owner has at least four residential properties. The surcharge can rise to 100% after three years, with a further 50 percentage points possible in certain cases involving multiple vacant homes.
A housing decree introduced in October 2026 also includes changes to local tax powers in areas under housing pressure, including surcharges on tourist accommodation. A 10% VAT charge is envisaged for certain short-term holiday lets, including stays of 30 nights or fewer.
The measures form part of a wider package intended to address Spain’s housing shortage and rapidly rising property prices. Other measures include greater protection against eviction, automatic renewal of some rental contracts and assistance for first-time buyers.
The October decree came into force on 7 October 2026 but remains subject to parliamentary ratification. For expat property owners, it is important to distinguish these changes from the existing IBI rules: surcharges depend on the applicable law and local council decisions, and are not an automatic nationwide charge.
The Spanish housing crisis has been further inflamed by the recent death of 87-year-old Maricarmen Abascal. Evicted on 23 September from her Madrid apartment, where she had lived for 71 years, Abascal faced unaffordable rent increases after an investment company purchased the property. Although campaigners subsequently secured an agreement allowing her to return home at her previous rent, she died on 7 October. Her case has sparked nationwide demonstrations, renewed demands for stronger tenant protections and a political crisis that prompted Prime Minister Pedro Sánchez to call an early election.
