As long as you are of retirement age and have made sufficient National Insurance contributions, your UK state pension would be guaranteed even if you retired to Portugal. Additionally, because Portugal is an EEA member, your UK pension will continue to rise in line with UK inflation.

But keep in mind that you’ll typically have to pay tax on your “worldwide income” if you choose live in Portugal. This implies that Portuguese taxes may apply to your foreign private pensions.

There are exceptions, however.  You’ll probably only have pay tax on your pension to the UK tax office, rather than the Portuguese one, if the UK state served as your employer (eg, you worked for the NHS).

The majority of Portuguese citizens will pay taxes. If you stay there for at least 183 days during a tax year or if you have established permanent residency by December 31st, you will be regarded as a tax resident. Foreign nationals can, however, apply for non-habitual residency (NHR) status and benefit from advantageous tax policies for a period of up to ten years, even on retirement income.

You must meet certain requirements, such as not having had a pension income from a foreign source, and not have been a tax resident in Portugal for the previous five years in order to be eligible for NHR status.

Under this scheme, most people only pay a flat rate of 10% tax on their pension. For comparison, if you pay the standard rates, it will increase progressively from 14.5% to over 48%.

In light of this, should you transfer your pension overseas or maintain it in the UK?

Even while retaining your pension in the UK is frequently the simplest choice, if you want to maximise your retirement income, it’s crucial to consider the advantages of transferring it abroad. A “Qualifying Recognised Overseas Pension Scheme” (QROPS) or an International SIPP are two possibilities that may provide advantageous tax status acknowledged by HMRC.

If you do choose to keep your pension in the UK, you should consider the status of your bank account, however, as since Brexit, some UK banks have been closing expats’ current accounts. Many work around this by maintaining a UK address or using a mail-forwarding service, but be aware that banks may change their policies in the future.

Answer supplied by Sonia Rola, a Chamber Member who is a Senior Associate Solicitor and Accredited Family Mediator at Buckles Solicitors LLP.

To contact and find more information about Sonia Rola, please click here

If you’re an EU or EFTA national, retiring in Portugal is relatively straightforward. Just apply for a residence permit at a regional Portuguese Immigration Service (SEF) office, get a registration certificate after three months, and even apply for permanent residence after five years.

For non-EU/EFTA citizens, the process is a bit more complex. You’ll need to apply for a residence permit at the Portuguese consulate in your home country. To qualify, make sure you have a valid passport, sufficient income or savings, and health insurance. Remember, rules may vary based on your nationality, so consult the Portuguese consulate in your country of residence first. Non-EU citizens can obtain a temporary residence permit for five years with the option to apply for permanent residence later.

Portugal offers the D7 Retirement Visa specifically for foreign retirees. Even if your pension is below the Portuguese minimum wage, you can still qualify if you have royalties, a pension, or income from real estate. However, you must prove that you can support yourself while in Portugal.

There is also the golden visa program, which provides residency rights for non-EU citizens. With this visa, you can live in Portugal and explore the wider Schengen region without needing additional visas. Your initial residence permit will be for one year and will be renewed every two years. After six years, you can apply for Portuguese citizenship.

To be eligible for the golden visa program, you must meet at least one of the following criteria:

·         Investment in property worth at least €500,000 on the Azores or Madeira islands or in mainland Portugal (excluding Lisbon, Porto, and coastal regions).

·         Purchase interior or island property for at least €350,000 with the intention of renovating it.

·         Transfer a capital amount of at least €1.5 million to a Portugal bank.

Investment of at least €500,000 in research projects in Portugal’s technological or scientific fields.

Answer supplied by Sonia Rola, a Chamber Member who is a Senior Associate Solicitor and Accredited Family Mediator at Buckles Solicitors LLP.

To contact and find more information about Sonia Rola, please click here