Budgeting for retirement in Spain including future care costs

Terms used

• IBI — The IBI is the yearly local property tax paid by owners of property in Spain.
• Residencia — A residencia is a care home for older people.
• Ayuda a domicilio — Ayuda a domicilio is help at home with personal care or household tasks.
• Centro de día — A centro de día is a day centre where older people spend daytime hours with care and activities.

Key rules

• Care years: Budget separately for the years when you may need help, because a care home costs far more than everyday living.
• Regional prices: Care prices vary widely by region, so use quotes from the area where you will live.
• UK state pension: A UK state pension keeps rising each year while you live in Spain.
• Other countries: Pensions from countries without an agreement, such as Canada or Australia, may not rise.
• Exchange rate: Test your plan with a weaker exchange rate than today's if your pension is paid in a foreign currency.

Care prices, living-cost figures and pension rules change often, so confirm current figures with local providers, the national statistics office and your pension payer.

Plan for three phases, not one

Budget for your active years, for years when you need some help, and for years when you need daily care. Many people only budget for the first phase and run short in the last. The calculator below lets you test your own numbers.

What to include in the budget

Build these categories into the plan:

• Housing: rent or mortgage, community fees, IBI, and the cost of adapting your home (ramps, a walk-in shower, a lift).
• Healthcare: private insurance, dental, optical, hearing and the co-payment on medicines.
• Long-term care: home help, a day centre or a care home (see below).
• Everyday costs: utilities and food, transport, and trips back to your home country.
• Taxes and advice: tax on your income, plus legal and tax help for wills and residence-tax questions.
• Funeral costs.
• Inflation and exchange-rate risk on any foreign pension.

Household spending data for people aged 65 and over is published by Spain's national statistics office, by region. Typical 65+ households spend less than the national average, and housing, energy and food are the biggest items. Spending is highest in Madrid, the Basque Country and Navarra, and lowest in Extremadura, Murcia and Andalucía. Use your own region's table as a starting point.

The three care routes and what drives their price

Prices change often and differ a lot by place, so get current quotes from local providers before you fix a figure.

Home help (ayuda a domicilio). Private help is charged per hour. Personal care costs more than cleaning. Nights, weekends and live-in arrangements cost more. Agencies in big cities charge more than those in small towns.

Day centre (centro de día). Private places are charged monthly. The price depends on your hours, whether transport and meals are included, and your level of dependency. Specialist care, for example for Alzheimer's, costs more. Madrid, Catalonia and the Basque Country are dearer than interior regions.

Care home (residencia). This is the biggest cost. A basic shared room in a private home starts in the low thousands of euros per month. Single rooms, high-dependency units and premium centres cost well above that, especially in Madrid, Barcelona, the Basque Country and the Balearics. Extremadura, Castilla-La Mancha, Castilla y León and interior Galicia are cheaper.

Because care homes are so much dearer than home help, decide in advance how much of your plan assumes each route. A sensible approach is to budget for home help first and keep a reserve for a residencia in your last years.

How your pension's currency and increases affect the budget

If your pension is paid in pounds or another foreign currency, a weaker exchange rate cuts your euro income. Your payer converts at its own rate. Test your budget with a lower rate than today's.

For tax, the official reference is the European Central Bank rate or the Banco de España published rate.

UK state pension: it goes up each year while you live in Spain, with the same rises as in the UK.

Pensions from most other EU countries: your home country's own rules apply, so check them.

Countries without an agreement, such as Canada or Australia: your pension may not go up at all. If that is you, assume it stays flat and let costs rise around it.

Even where pensions rise, care costs may rise faster than your income, so leave a margin.

Build the plan

1. Add up the categories above at today's prices.
2. Add a care line for each route, using local quotes.
3. Convert your pension at a cautious exchange rate.
4. Apply your pension's yearly increase, or none if it is not covered.
5. Compare income with costs for each phase, and check the care years are funded.

Estimate your Spanish retirement budget including care costs

Work it out

What you enter

• Your net pension income per month, after tax (EUR): Your bank statements or pension payment notices, converted to euros at the rate your bank gives you.
• Your normal living costs per month, including housing (EUR): Your last 6 months of bank statements, or the regional tables for households aged 65 and over on the national statistics office website.
• Costs of keeping your home if you move into a care home, per month (EUR): Community fees, property tax, insurance and utilities in your bills. Enter 0 if you rent it out or sell it.
• Monthly price of a private care home place (residencia) (EUR): Written quotes from two or three care homes in your region, for the room type you would need.
• Hourly price of private home-care help (EUR): Quotes from local home-care agencies, for personal care rather than cleaning.
• Hours of home-care help you would need per month (hours): The care plan from your regional social services department, or your own estimate of weekly help.
• Monthly price of a day centre (centro de día), if you would use one (EUR): Quotes from local day centres. Enter 0 if you would not use one.
• Yearly rise in your pension (%): Your pension payer's yearly uprating notice. Enter 0 if your pension is not uprated where you live.
• Expected yearly rise in care prices (%): Ask the care home or agency how much their prices rose in the last 2 or 3 years.
• Years ahead you want to plan for (years): Your own planning horizon, for example 10 years.

Figures used

• Share of pension a resident may pay in a subsidised place, upper end: 90 % (as of 2025; check the current figure before you rely on it)

Worked example (with Your net pension income per month, after tax 2,000 EUR, Your normal living costs per month, including housing 1,400 EUR, Costs of keeping your home if you move into a care home, per month 300 EUR, Monthly price of a private care home place (residencia) 2,400 EUR, Hourly price of private home-care help 18 EUR, Hours of home-care help you would need per month 40 hours, Monthly price of a day centre (centro de día), if you would use one 900 EUR, Yearly rise in your pension 2 %, Expected yearly rise in care prices 4 %, Years ahead you want to plan for 10 years)

When the sum misleads

• Growth is a simple yearly addition, not compounded, so over long periods the real figures will be a little higher.
• Subsidised places need a recognised dependency grade and a place on the waiting list. The share of your pension and whether savings or property count differ by region, so ask your regional social services department.
• If your pension is paid in another currency, enter the euro amount at your bank's current rate and test a lower rate too.
• If your pension is not uprated in Spain, enter 0 for the yearly rise.
• Private care prices vary a lot by room type and dependency level, so use written quotes rather than averages.

Frequently asked questions

Does my UK state pension go up each year if I live in Spain?

Yes, UK state pensions are uprated each year for residents in Spain, so you get the same rises as in the UK. Pensioners from most other EU countries follow their home country's own rules. If you come from a country without an agreement, such as Canada or Australia, your pension may not rise, so ask your pension payer.

Which exchange rate should I use for a foreign pension?

For tax purposes, use the European Central Bank reference rate or the rate published by the Banco de España, Spain's central bank. Your pension payer converts the money at its own rate, so the amount you receive can differ from the official figure.

Why do care home prices vary so much between regions?

Prices depend on the room type, the dependency level and the services included, as well as the region. Madrid, Barcelona, the Basque Country and the Balearics cost most. Extremadura, Castilla-La Mancha, Castilla y León and inland Galicia are cheaper. Ask several homes for their full price list.

Where can I find average spending for households aged 65 and over?

The national statistics office (INE) publishes a household budget survey with spending by region and by the age of the main earner. Housing, energy and food are the main items for households aged 65 and over.