Expats Overcharged on Mortgages in Spain
A scandal has erupted in the expat press in Spain over the so-called ‘floor clause’ in mortgage deals offered to expats in the country. This resulted in people being charged more than they should have been for their monthly payments because of a buried clause in their contracts, which effectively prevented interest from dropping below a set level of 3% to 3.5%.
This mainly affected expats who took out a mortgage between 2002 and 2012. Some of those affected should have been paying interest of around 1.5% but were instead paying over 3%. However, many affected mortgage holders have managed to claim refunds. If you think this may have impacted you, your mortgage needs to meet a number of conditions:
- Your mortgage needs to have been taken out between 2002 and 2012
- A floor clause must have been included in the contract
- The contract must conform to legal criteria relating to lack of transparency and proven overpayment
You should be able to reclaim all your overpaid interest, even if you no longer live in the property.
Lenders include:
- Banco Popular
- Banco Sabadell
- Cajaduero
- Caja España
- Cajasur
- El Monte
- Solbank
- Unicaja
Fairway legal team’s Diego Echavarría has managed to reclaim around €3 million for 150 British clients, mainly in Malaga, Catalunya and Alicante, but says that “thousands” more might be eligible to claim. Meanwhile, trust in the Spanish banking system has been severely dented among expats in Spain and beyond.
Dubai: Continued Impact of Conflict
The press reports this month that around one in eight British citizens have now left Dubai after the recent conflict between the US and Iran. We have reported before on the potential tax implications for returning Brits, who may now be targeted by HMRC.
However, recent reports suggest that the UK government might be moving towards a more accommodating attitude towards returnees, promoting the UK as a “safe harbour economy” in contrast to an increasingly unstable Middle East. This is seen by some as an opportunity to attract talent, mainly in tech, back to the UK.
Chancellor Rachel Reeves has been advocating for “the lowest rate of corporation tax in the G7” and no stamp duty on shares for your first three years. She has also suggested that the Treasury might be prepared to revisit some tax regulations.
This attempt to present Britain as an attractive tax haven might be regarded as an uphill struggle, given the highly advantageous approach to taxation in places like Dubai. Moreover, it is looking as though many expats have not returned to the UK, but are relocating, perhaps temporarily, to tax havens such as Switzerland or lower-cost destinations like Spain and Portugal. Some Brits who have remained in Dubai told the press that they were considering moves to Southeast Asian nations such as Bali or Bangkok.
Stallone Shaikh, the founder of Alliance Street Consultancy, a company which assists expats in moving businesses to the UAE, gave his opinion to CNBC:
“I doubt that Rachel Reeves’ review will be enough to bring rich expats back from the UAE. For ultra‑high‑net‑worth individuals, these changes simply don’t move the needle. The UK is punishing people for making money instead of encouraging them.”
UK Pensioners ‘Worst Off’ in Europe
The 2026 Pension Breakeven Index from Almond Financial shows that current UK pensions are running at only 26% above the cost of essentials, resulting in a significant discrepancy between pensions issued in Britain and those in Europe: British pensioners are considered to be receiving around £200 less than their European counterparts. In Luxembourg, for instance, pensions are around six times the cost of living.
State pensions in the UK are, on average, around £1,045 per month, with an estimated monthly living cost average of £825. This leaves British pensioners who are dependent solely on their state pension with a tight financial margin. Almond Financial’s Sam Robinson told the press:
“This year’s increase to the UK state pension has offered a welcomed boost to pension income versus the cost of living, meaning pensions could feel slightly better off. Despite this, the UK state pension still rests just above the breakeven point, and remains weak compared to other pension systems across Europe. Planning for life after work is crucial, and it’s important to seek advice from a pension advisor if you aren’t sure where to start.”
However, it’s not all bleak news: The Motley Fool’s Mark Hartley explains that although the amount of the pension is low in the UK compared to some other nations in the EU, the upside is that the UK pension system scores better on long-term sustainability. This is because it leans more heavily on workplace and private pensions instead of imposing the bulk of the cost onto the state.
Relocation Incentive Schemes
You may have noticed regular articles in the press about “ghost” towns and villages in places such as Italy and Spain, where changing demographics have resulted in the local population diminishing as older residents die and young people move into cities. Some countries have been offering financial incentives to Brits, among others, to move to such places.
In Italy, regions such as Calabria, Molise and Sardinia have been suffering from significant depopulation, and local governments are offering between €10,000 (£8,705.50) and €30,000 (£26,116.50) to people willing to relocate. These offers do not come without strings attached: you will need to be under the age of 40 and prepared to carry out improvements on the building you live in, and you may need to set up a business.
In parts of Spain, there are similar schemes, offering up to €3,000 in relocation expenses, and in these cases you will need to make a five-year commitment to staying. Greece has an analogous programme, for instance offering up to €500 per month for three years for living on the island of Antikythera. This scheme is aimed at families and professionals such as farmers and bakers who will benefit the local community.