The Concept of Income Drawdown

Income drawdown is also called pension drawdown. It’s a kind of pension withdrawal in which you take out a portion of your pension amount and the remaining amount keep invested so that it could increase with time. Pension drawdown is a very good alternative to purchasing an annuity. With it you can withdraw an amount of up to 25% of your total pension amount; there is no tax imposed on this withdrawal.

Pension drawdown offers you a high degree of flexibility in the use of your pension amount. The remaining amount in your pension account could be transferred on to your children or dependents in case of your death.

Income drawdown is best suited for individuals who have larger funds or those having multiple retirement income sources. This is because there is a certain amount of risk involved in it; that is why it is sometimes called unsecured pension. Although there is an element of risk, but the reward of this risk taking is also great. The risk is that the income generated from this source tends to vary within fixed minimum and maximum limits. The minimum return could be naught while maximum could be as high as over hundred percent (this much high return is not possible with other schemes in the class). The income drawdown rates may at times differ between men and women.

Income drawdown facility is available until the age of 75 years. After 75 years the drawdown scheme is generally terminated and the remaining money is transferred to Alternative Secured Pension (ASP). The option of traditional annuity plan to receive regular income is open even after the termination of the pension drawdown facility.

You may get more information about the concept of income drawdown and other associated information like income drawdown rates, income drawdown death benefits, income drawdown calculator, etc., at: http://www.gerardassociates.co.uk/.

The Major Benefits of QROPS Pension Transfer

QROPS stands for Qualifying Recognized Overseas Pension Scheme. It is an overseas pension scheme that fulfills certain requirements so that it can be recognized by Her Majesty’s Revenue and Customs (HMRC). QROPS can receive transfer of U.K. pension benefits without the need of any unauthorized payment and scheme sanction charges.

QROPS is applicable for the U.K. residents who emigrate from U.K. to some other country, having built up a pension fund within a scheme permitted by HMRC. It is also applicable in the case of persons born abroad who have build up benefits in an HMRC authorized U.K. pension scheme and who decide to return to their home country, i.e., U.K.

QROPS offers many important advantages for the natives of U.K. who are pension holders; following are some of its major benefits:

Tax Savings – You can withdraw a lump sum amount of up to 30% from your QROPS; this amount will be tax free. This amount could be more than 30% at times, depending upon the rules and regulations of certain jurisdictions. If you are leaving your QROPS pension amount to your heir(s) after your death, this amount would be exempted from inheritance tax.

Investment Flexibility – With a QROPS account you get the option of choosing from a wide range of investment options. You can also get advice regarding investment from your QROPS advisor.

Currency Exchange Benefit – QROPS also provides you currency exchange benefit. The benefit is in the form of savings you made on currency exchange. Suppose you are withdrawing your pension amount in the country where your QROPS was set up, in this case, you don’t have to transfer money from U.K. to your overseas account. This means that the amount you receive will not get reduced owing to the variation in exchange rates. Also, you will not be required to pay any service charge for currency exchange.

Transfer of Funds – In case of the pensioner’s death, all unused pension funds in his/her account would be transferred to the beneficiaries. There is no need to take an annuity or pay U.K. tax charge upon death of the pensioner.

Consolidating Pension Funds – QROPS allows you to consolidate multiple small pension funds into one. This option provides economies of scale by reducing administration costs.

Gerard Associated Pvt. Ltd. is a Financial Services Authority authorized and regulated firm. The firm deals in financial matters related to Pensions, Investments, Asset Protection, and Tax Solutions, but their specialization is in QROPS. To see the HMRC QROPS list and to get other associated information, you may visit: http://www.gerardassociates.co.uk/.

No Rise in Interest Rate- UK Unemployment Count Grows

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.
Cash and income timing from a UK Pension income drawdown, flexible pensionsor QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions,income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

The release of the MPC minutes confirmed that policy makers would not be increasing Great Britain’s historically low interest rate. A unanimous decision, 0-9, indicated to the markets that the UK is unlikely to respond to consistently high inflation, and the committee reiterated its assertions that short term factors such as commodity prices are the key drivers.
The UK unemployment count did go up for the month of July with a 17.1k increase. On the back of early August’s London riots the Government has made £20million accessible to affected councils precisely to assist regeneration and job creation, but one can explain this unexpected increase as being reflective of an increase in the graduate job market over the course of the summer.

Talks within Europe, following the meeting between Germany’s Angela Merkel and France’s Nicholas Sarkozy, focussed on the potential introduction of a financial transaction tax – and this focus on the systemic and structural review of the EU saw sharp movements in the value of the single currency. From midday BST GBP/EUR rose from 1.1352 to over the 1.1450
before the close, which confirms that volatility still remains prevalent. The 1.2% year on year European CPI figure, coming in 0.5% below expectations, confirms that key economies such as Germany are seeing a slowdown of sorts. Across the pond the US posted a better than expected Purchasing Price manager’s Index, and when coupled with assertions that the Fed will keep interest rates on hold for as long as two years, suggested earlier in the week, we may see an increase in the effects of inflation withinworld’s largest economy too. GBP/USD has breached the 1.65 mark, and did so even before the European close. Against the EUR the dollar holds above 1.44, despite poor earnings figures coming through from a number of European companies, meaning that the day begins with European equities beginning firmly in the red.

Today brings more economic information for the United States, with Consumer prices, unemployment and homes sales coming under close scrutiny. With the majority of this information being released around midday it would seem that the focus will not be on European discussions, but this could prove to be a choppy day for the world’s reserve currency against the majority of majors.

IN THE UK
• The Bank of England’s Monetary Policy Committee votes unanimously to hold interest rates at record lows
• One of the MPC’s members, Adam Posen, as usual votes in favour of an increase to the asset purchasing facility; and the potential of further Quantitative Easing remains given the sustained level of inflation
• Average earnings in the UK rise for 2.3% to 2.6%, which both beats the previous month’s and exceed expectations. This does not account for the increase in unemployed graduate numbers, which is visible through and increase in the UK unemployment count
• Sterling shows a highly reactionary move; with a full cent change over the course of the European sessions. GBP moved from 1.1350 to 1.1450 over the course of the afternoon, despite European decision makers showing unity over the route the EU must take to reform its financial and debt policies

ELSEWHERE
• Consumer prices in general came through on par for the Eurozone, however the core price index did should a fractional drop below the expected 1.7% increase
• The majority of focus was on the notion of Eurobonds and their uses in controlling the contagion affect across the Eurozone. Whilst EUR/USD traded within a relatively narrow range (1.43809 – 1.4452) the market remains uncertain, and the ban on short selling has done to curb the drop off broadly across the European exchanges.
• The USD dropped considerably against sterling to reach a floor at 1.65536, prompting the view that risk had returned slightly to the market place, and that the UK was still the market of choice for credit and debt derivate contracts
• Although the CHF lost ground against GBP, it has been conclude that the SNB has been unsuccessful in curbing its significant strengthening, and there was no talk whatsoever of a currency peg, which had been on the cards earlier in the week

DATA TO LOOK OUT FOR
• US core CPI and unemployment figures should give a more detailed figure of the scale and effects of inflation on the US grass roots economy
• US existing homes sales are expected to exceed 4.77M forecast to reach a predicted 4.91M level
• A level figures released in the UK will reveal the effects of the secondary education uptake for the year to come, as more applicants and fewer places, coupled with a tuition fee increase may see an increase in the number of unemployed young people entering the market


Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Greek Debt Restructuring Inevitable, Markets Considering Meeting Minutes

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken. Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

Yesterday was very flat for UK data. The Eurozone economies did release periphery information, with both the French and the Germans providing services and manufacturing Indexed data. Despite both the French and the Germans releasing better figures than had been forecast, the information was eclipsed by further scrutiny of the Portuguese bailout petition and Greek debt restructuring. Restructuring of the Greek debt is considered inevitable, and until the Greek government can provide sufficient assurances and a viable solution to these debt troubles confidence will continue to be shaky.

Following the suggestion that one of the front runners in the Finish elections, the True Finns, might seek to prevent the proposed Portuguese bailout, Jyrki Katainen (leader of the party most likely to form the new government coalition), came forward to say he expected little change in the proposal. Despite this attempt to steady the nerves of Finland’s European neighbours the euro seemed vulnerable against the pound throughout the day’s trading; having said that, against the dollar the euro did recover from its worst one-day fall in two months to a price of 1.43. Sterling opened the session at 1.141 and rose in value fractionally to a high of 1.1434, but this gain was lost by mid-morning, and by the European closing bell the pound was trading at 1.1389 (0.8780).

For today the markets will be focussing acutely on minutes from the most recent Monetary Policy Committee meeting. Sentiment is expected to follow broadly along the lines of last month’s release, and CPI figures showing a lessening of the pace of inflation may well see the pound hold at around the 1.13 – 1.1350 mark.

The pound enjoyed a fractional improvement against the green back over the course of the UK session. It has broadly been agreed that the US is unlikely to default on its loans; an opinion which lends weight to the view the S&P’s murmurings over the US’s AAA long-term rating is politically motivated, and calculated to place pressure on President Obama with regards to delivering on his drastic plans for deficit reduction. The UK has seen austerity measures undermine their growth, and the suggestion is that such growth as might reasonably have been expected with the US will be significantly impeded by the $4-5trn in planned savings over the next decade.

Gold and silver prices continued to exceed their previous highs; likewise safe haven currencies such as the Swiss Franc have been the subject of increased interest. With risk aversion re-entering the market one cannot help but feel that short sellers and speculators are driving rate movements, especially in the absence of overt or weighty economic data. So, all eyes will be on the MPC as financial markets are still entertaining expectations of an interest increase in the near term, however key to today’s release is assessing the conviction of those MPC members who have voted to hold rates. Lloyds bank hold their resistance levels for GBP/EUR at 1.18 by year end, which suggests that even a change in sentiment from the MPC fence sitters has already been priced into the value of sterling and indications as to when a rate hike might occur could do little to propel the pound higher as the year progresses.

IN THE UK

• Pound hits highs of $1.6370 against US dollar yesterday as dollar is sold off in favour of riskier currencies.
• Sterling sees slight gains yesterday as market participants look to comments from the BoE minutes today, many believe the comments could reveal the possibility of a rate hike in May.

ELSEWHERE

• Finland’s Prime Minister elect says Finland will not upset Portugal bailout plans
• Euro takes advantage of dollar selling and stay around highs of $1.4429
• ECB member Mersch says Spain is in a different situation to Portugal and Greece, and dismissed rumours of imminent trouble
• Europe’s key economies out perform manufacturing forecasts, but consumer confidence remains weak.
• Japan suffers as trade balance is realised significantly below expectations

DATA TO LOOK OUT FOR

• Headline date this morning is the release of the Bank of England minutes, most analysts expect voting to stay at 6-3, however a swing from this will cause significant GBP volatility.
• Spanish and Portuguese bond auctions this morning, results released 10.30. Good results for Spain will keep the wolf from the door
• US MBA Mortgage Applications and Existing Home Sales will both reveal how the US housing market performed last month. The housing market in the US is one of the Fed’s main concerns and improvements over consensus will support the US dollar.
• 3.30pm sees EIA Crude Oil Stocks change

Current Spot Rates (9.00am) 20th April 2011
	USD	EUR	AUD	CAD	CHF	SEK	ZAR	JPY
GBP	1.6360	1.1342	1.5419	1.5587	1.4638	10.09	11.09	135.435
USD		1.4424	0.9425	0.9528	0.8947	6.17	6.78	82.78

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS Pensions, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS (Qualifying Recognised Overseas Pension Scheme) and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Euro’s strength Fails While US dollar Gains Back Some Ground

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory. In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS (Qualifying Recognised Overseas Pension Schemes) and now QNUPS.

The euro’s recent strength seemed to come to an end yesterday, after the single currency fell across the board after speculation of a debt re-structure for Greece outlined the potential debt problems in the Eurozone.

Greece had secured a €110 billion bailout last year, contributed by the EU and IMF, and the government believe that the country would not make it through the summer without a restructure.

Their overall debt stands at €325 billion, double that of what economists see as stable, and far bigger than Argentina’s when they defaulted in 2001. This added with Portugal’s pending bailout has worried investors that bigger countries such as Spain could fall into the same situation weighed heavily on the euro causing it to lose around 1.5% at its worst against the dollar. The day range was between $1.4421 high and $1.4155 low.

It has also caused investors to worry that the tight fiscal guidelines imposed by the Eurozone government may force countries to opt out of the euro as their individual debt problems escalate.

On the other side of the pond the US dollar gained back some ground as risk avert investors opted for safe haven currencies. The Eurozone news what partly to blame for dollars progression, but the brunt of the risk worry came from the announcement by credit ratings agency S & P to issue a negative outlook for the US Government debt. S & P believe that there is a 33% chance that they will lower the AAA rating that is currently held by the US sometime in the next two years.

The US policymakers are to look at a deficit reduction plan, and will look at ways to save between $4 – 5 trillion over the next 10 -12 years. This could mean following the UK by implicating huge spending cuts in important sectors. There were no major data releases yesterday, and aside from Eurozone Consumer Confidence figures and US Home Starts there are few significant releases today.

The main focus will be on the BoE minutes tomorrow, to see if the current 5-3-1, in favour of no rate hike has changed. German Producer Price Index is also a key data release early tomorrow morning.

IN THE UK

• Quiet day for UK data but pound breaks back through €1.14 against euro, hitting a high of €1.1439
• Eyes move to Bank of England minutes tomorrow, has another voter joined the hawks or does it still stand at 6-3?
• Q1 Preliminary GDP figures are released 27th April; results will undoubtedly have an effect on next month’s interest rate decision.
  

ELSEWHERE

• US dollar responds violently as Standard and Poors warn US that it may lose its AAA rating due to Government debt, dropping outlook to negative.
• News of defaults and debt restructuring in Europe filters around the trading floors in the afternoon and euro falls from $1.4421 to $1.4155.
• Analysts believe other Eurozone countries may also have to re-structure and fiscal pressures may force countries to opt out of the euro.
• RBA minutes reveal little about stance on Australia interest rates, but mention waiting to see full impact of Japan’s quake on their exports
• Gold hit new all-time high of $1497.20
• German PMI drops this morning below consensus although European as whole remains on target, euro remains largely unaffected.

DATA TO LOOK OUT FOR

• Canadian CPI released this afternoon, like the rest of the world inflation is expected to rise. Bank of Canada have left rates on hold at 1% since Sept last year. A figure of 2.8% for the year is expected, anymore would lead to further CAD strengthening.
• 1.30pm sees Housing Starts in US along with Building Permits; both figures are expected to rise.
• At 3.00 Eurozone Consumer Confidence is released, as debt worries plague the EU consumer, confidence is expected to fall to -11
• Japan’s Trade Balance is released just before midnight; the figures are for March and will help to reveal how devastating the earthquakes have been.
  

Current Spot Rates (9.00am) 19th April 2011
	USD	EUR	AUD	CAD	CHF	SEK	ZAR	JPY
GBP	1.6266	1.1411	1.5533	1.5686	1.4575	10.19	11.13	134.217
USD		1.4252	0.9549	0.9643	0.8960	6.26	6.84	82.514

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for QROPS Pensions, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.