Last Updated on 15th October 2025
Malta is an incredibly popular retirement destination, but it remains vital for any prospective expat or foreign national living in Malta and planning their retirement to ensure they have a solid budget that verifies that they’ll be able to sustain their lifestyle.
Looking at the forecast value of pension funds and retirement assets often isn’t enough. Even though a substantial pension pot may look reassuring, your living costs, plans, and changes to passive and employment incomes could all have an impact on what you need to live happily in retirement.
Our wealth managers in Malta have collated this guide to showcase some of the many considerations we look at when creating a retirement strategy and explained some of the factors to be mindful of when evaluating your financial readiness for retirement.
Costs of Living in Malta for Expatriate Retirees
We’ve discussed general living costs in Malta in our earlier guide, titled Calculating the Cost of Living in Malta, which you are welcome to review if you’d like clarity about the aspects of life on the island that are more affordable than in the UK.
However, for expats who are already living in Malta and looking ahead to retirement, or those intending to relocate in a few years, it’s essential to review projected living costs, as these could change. For example:
- Private health insurance is widely used, both by expats who must hold comprehensive insurance to meet their visa requirements and by those who want access to quality, speedy treatment if they are injured or become ill. Unfortunately, most health insurance companies tend to increase premiums, sometimes by a significant margin, based on your age.
- Older adults are more likely to need to incorporate care costs into their budgets, whether to ensure they have provided for their own future care or to cover the costs of care in Malta or the UK for relatives and loved ones.
- Plans to purchase a home, finance grandchildren’s education, or help with the costs of a wedding or other life event can all affect your budgets, especially if some of those outgoings are subject to fluctuations, such as the cost of buying a Maltese property.
- Expats in Malta remain eligible to receive the UK State Pension, with the annual increase. If you have this paid into a UK bank account, the actual value received could vary depending on currency exchange rates and international transfer fees.
These are just a few of the many reasons we recommend creating a detailed retirement budget, without assuming that your existing living costs or your projected pension income will remain static.
How Transferring or Restructuring Pension Funds Can Impact Your Retirement Income in Malta
The next aspect of retirement planning relates to your pension funds. There are numerous options, and you may have already decided to transfer a UK-based scheme to a Maltese Recognised Overseas Pension Scheme (ROPS), leave your pension funds in Britain and draw on them from overseas, or explore an alternative transfer route, such as a Self-Invested Personal Pension (SIPP).
There are many pitfalls and caveats to pension transfers, and it is strongly advisable that you speak to a seasoned adviser who is familiar with both the Maltese and the UK tax systems. That’s because:
- Pensions transferred outside of the UK and worth over £1.073 million may be exposed to the Overseas Transfer Charge (OTC) – a tax that applies at 25% to your entire pension value above the threshold.
- Transferring or restructuring a pension is not without cost or risk, and you must know how this will affect your net retirement wealth, accounting for admin fees and the risks associated with your underlying pension assets.
- Some types of pensions, particularly defined benefit schemes, are rarely worth transferring. That is because you will lose a guaranteed lifetime income, sacrifice all protections built into the fund, and could find that below-expected asset performance erodes your pension wealth.
This doesn’t imply that it is always better to leave UK pension funds in Britain, because this can also have downsides. They include the volatility of exchange rates affecting the value of a lump-sum drawdown, transfer charges and exchange fees being deducted from regular payments, and potential exposure to UK taxation, including future Inheritance Tax for your beneficiaries.
What it does mean is that you should have independent advice and evaluate all of the options before you settle on the right way to manage your pensions as a Maltese retiree.
Understanding Maltese Pension Taxation
Your income will naturally differ once you retire, although the differential may be minor for those with investment portfolios and passive incomes, who can continue to enjoy relatively stable revenues that last long into retirement.
That said, you will need to review tax rates and schemes since these could make a meaningful impact on the taxes you pay as a foreign national retiree.
Malta and the UK have a double tax treaty, which prevents you from being taxed twice on the same income. But, if you have cross-border incomes and pensions, you must ensure that these are applied and claimed correctly to ensure compliance within each respective jurisdiction.
There are several schemes and options, including paying tax on pensions at the standard income tax rates or opting to apply for the Malta Retirement Programme (MRP), which offers a flat-rate 15% tax on foreign-sourced pension income, subject to a minimum annual contribution.
Expats might also need to consider whether they qualify for exemptions against pension taxation. The Maltese government has introduced reforms beginning in 2022 that mean a progressively higher proportion of certain pensions are not taxed, extending up to 100% of pensions up to €16,636 a year in 2026.
Expert Support Creating Up-to-Date Retirement Plans as a Maltese Resident
Retirement plans may need to be periodically updated. This helps ensure you know which tax initiatives are available that could have a sizable effect on your tax burden and make informed choices as you get closer to retirement.
For more information, you can contact the Chase Buchanan Private Wealth Management team in Malta, get in touch with our colleagues worldwide, or enquire via our Administration Centre in the UK to arrange a convenient time to speak with one of our experienced advisers.
© Chase Buchanan Private Wealth Management.
Chase Buchanan Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission with CIF Licence 287/15 and offers its services in the EU on a cross-border basis as per the provisions of MiFID.
Chase Buchanan Insurance Services, Agents & Advisors is authorised and regulated by the Cyprus Insurance Companies Control Service with License No 6883 and offers services in the EU on a cross-border basis as per the provisions of the Insurance Distribution Directive (IDD).
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*Information correct as at October 2025
