The truth about retiring in Spain

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    • #56984

      For the majority of expatriate residents, living in Spain means an escape from grey skies, traffic jams, stress and restaurants which charge you a day’s wages just for a meal. The all year round sunshine, the relaxed way of life and the relatively cheap cost of living make this country a paradise for the thousands of people from northern Europe who have made Spain their new home. However, it not all sunshine, sea, sunbathing, sand, siesta, sangria or paella.

      One of the most endearing things about the Spanish is their wonderfully relaxed “manana” attitude. If you don’t have enough cash to pay a bar bill in rural areas of Spain the owner will normally just shrug his shoulders and tell you to come back tomorrow. However, if you need anything doing in a hurry that’s when some Spaniards could drive you completely nuts! you learn just not to let it, but it is quite frustrating when it seems so alien.

      Many people move to Spain to escape problems in their own country – only to find themselves confronted with a new set of problems which can occasionally be even worse than the ones they left behind. They also may have thought they had left the ones behind only to be confronted with them again after a short time here. The Spanish have a different way of doing things than most Europeans, the language can be a problem in certain areas (unless you take the trouble to master some basic Spanish).

      Most people retire when they are 65 or 66 years of age but on avarage how long do people live for after they have retired? Many people die when they are in their 60’s and don’t manage to get to 70. Some die even before they reach retirement age. If people do manage to get to 80 years of age they really are just grave dodgers and just counting the days before they depart this mortal coil. People in their 80’s really don’t give a damn about anything anymore because they know that their time on this planet is very short. It is not as if people who have retired remain in the same physical condition till the day they die. As people get older they physically deteriorate, their health worsens, get more ailments, come down with more medical problems, find out that they cannot walk as far as they used to or cannot go for a jog or play football without their muscles or joints hurting, their eyesight will progressively get worse, their hearing will deteriorate, their skin will lose its elasticity, their noses will get longer and their ears will get bigger as they get older, and the incontinence they may face and they will shrink in size as well as their muscles will slowly wither away. Oh! the joys of getting old especially for those looking forward to their retirement.

      The Government is saying that people are living longer but the statistics to support this are dubious. It is argued that advances and improvements in healthcare and medicine are helping people to live longer but then again the stresses of modern day life means that people are having to endure far more stress than they had to do in the past and stress is a killer.

      Say for instance someone retires at 65 and goes to live in Spain. They can expect to live there for a few years and then one day, bang, they are dead. They bought a coffin in the Sun. A evolutionary dead end. They cannot move to a bigger property because nobody in their right mind will give a mortgage to someone in their 60’s. The meagre and measly and miserable state pension that most pensioners get from the Government is a pitiful £6,000 (pounds sterling) a year. Try surviving on that when food prices and utility bills and annual property taxes are going through the roof. Not many people who reach retirement age will want to continue working and in any case nobody will want to employ someone who is well past it and in their dotage. Because few people go on to live into their seventies this means that anybody who retired at 65 years of age ten years ago is likely to be dead by now.

      Retiring to Spain should really be called dieing in Spain. The reason for retiring to Spain was that it used to be cheap for housing and bills and because of the weather and scenery. However, sunshine does not pay the bills and Spain is no longer cheap for housing or for the bills you have to pay and this is true despite the crash in property prices. People retiring to Spain will be morooned in a property they cannot afford to move away from, living a hand to mouth existence in a state of penury on their meagre state pension from the UK Government whilst they continue to see all around them Spain collapsing economically and will be surrounded by numerous vacant properties that nobody wants to buy. As money starts to get tight the retirees in Spain will go out to restaurants less often, will stop going to bars for a drink, will stay at home more often, a prisoner in their own home.

      Pensioners have been brought to breaking point by:
      • A drop in the pound against the euro by almost a quarter in three years;
      • Pitiful savings rates that have slashed their income by two-thirds;
      • The near collapse of the Spanish and Portuguese economies;
      • A 50% fall in the value of their Spanish homes since 2007, and;
      • Warnings prices could drop another 30% if they don’t leave now.

      People who retired to Spain were hoping to get a piece of paradise in the sun and instead all they are going to get is a coffin in the sun and a one way ticket to the grave.

      A warning for all those people who will be retiring. The amount of pension that people will receive have been severely affected by the following decisions:

      • The former UK Chancellor of the Exchequer (finance minister) Gordon Brown raided pension funds some years back by imposing a tax on pension funds.
      • Annuity rates have fallen alot recently because of all the quantitative easing by the Bank of England which has been used to buy government gilts (bonds) which has pushed up the price of gilts which means that the return on them – the yield – will fall as a percentage of the price of the gilts.
      • Annuity rates are also related to life expectancy: if an insurer thinks it will be paying you an income for 30 years after retiring it isn’t going to commit to paying as much each year as it would if it thought you’d only be around for 20 years. As people live longer, annuity rates fall.
      • The Government or more precisely the Bank of England have consistently lied about inflation. All the Quantitative easing that has taken place is the Bank of England effectively creating money out of thin air, basically printing money but it is done electronically just by inventing a figure and putting it into the Bank of England’s bank account. This is inflationary as it diminishes the value of money that is already in circulation in the economy and has the effect of raising prices.
      • The Government has already raised the retirement age from 65 to 68. This is because the Government anticipates that people will live longer and so will have to pay out more in pensions and so the Government wants people to contribute more to their pensions. Eventually the Government will increase the retirement age to 70 years of age, effectively meaning that people will have to work until they drop dead.
      • The value of shares on stock markets around the World has entered a prolonged bear market in which share prices will be falling in the long term over the next twenty years particularly as the United States is in the grip of the worst recession since the Great Depression and the Chinese economy will slowdown appreciably over the next few years and the euro crisis has badly affected the eurozone economies. The deteriorating global economy will also mean that corporate earnings will suffer badly which in addition to causing the value of shares to fall will mean that the dividend payouts from the shares of companies will also fall dramatically. This means that pension funds which are mostly reliant on receiving income from shares will suffer badly over the next decade or two.

    • #111407

      This is one of the most idiotic posts I’ve seen on this blog. People move to a new country and they may face “new” problems? Really?

      I guess the point is that people who do not retire to Spain live forever. And those who do move to Spain die.

    • #111408

      I’m going to be Devil’s Advocate here. Lots of what is there is very true but most people just don’t want to think about it. ?

      I would guess that the main group of people who moved to the sun to retire over the past 10 years were early/mid 60’s. I do also wonder what is going to happen when they get into their 80’s or 90’s and they will be finding things a lot more difficult. Retirement ‘communes’ full of Brits is the only way I can see as a solution, but not the greed that came with the property boom. There should be decently priced places where people pay a rent and stay there in the sunshine but with the support of carers and other english speakers around them until their last days. Many people don’t want, or can’t, return to the UK, and after time away it would have changed from when they were last there anyway.

      It’s sad that the British all seem to want to con one another. Why can’t there be cheap retirement homes set up in exchange for a property which, say, a current widow cannot sell but that she doesn’t feel safe living in by herself. She should be able to swop her flat/house in Spain (even one of those illegal ones) for the care until her last days. People just can’t sell at the moment. So many think that the prices will drop and drop, yes from the banks i’m sure they will as the banks can take the hit. How can a person drop 80/90% of their property price as where will they go afterwards? They might be able to rent for a while but what if that pot of money runs out? They could rent for 200 euros but when you add bills, food etc. it would be a tricky living.

      I in my mid 30’s hopefully have a while to go before I have to think more about it but I worry that too many British people in Spain moved out with good health and have their heads in the sand about what they are actually going to do if their health suffers. How many would know who to call, what to do if a loved one died? Funerals are usually within 24 hours in Spain, would they rush through and not give family time to get there from the UK? What will the remaining person do alone?

      It does worry me and I think that the British Consulate and the local British newspapers need to highlight that a good number of people out in Spain need to have a realistic think about ‘what will happen one day’.

      But, maybe the first message was a bit harshly put and a bit too scaremongering…… ?

    • #111741

      Hi, we may have the option to pay off our Spanish mortgage and then have more income out of pensions to go and retire there, but I have read that there are charges/taxes on this.
      We know we will pay 0.25% to the bank on redemption. Is that all? If other costs how much?
      Thank you.

    • #111742

      Holly I’ve heard of another charge for getting the mortgage removed from some register somewhere. I can’t remember the details but someone also told me that nobody does it unless they need to prove the property is clear of debts, since there’s no real benefit in doing it. I think the charge is probably a few hundred euros, which you pay to the Spanish state for doing something that should only involve pressing a button on a computer somewhere.

    • #111743

      I posted once that daughter paid about 800€. This included Notary and land registry fees and a few hundred for a Lawyer to do it. This was at least 10 years ago.

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