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/.

QROPS Providers

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 and now QNUPS.

Sterling hit a near 7 month low of €1.1188 yesterday over the on-going concerns the Bank of England will need to pump extra money into the economy in the form of quantitative easing. Investors eagerly await the release of the UK’s third quarter GDP figures due today at 9:30am with expectations the UK economy expanded by 0.4% which is only a third of the 1.2% growth recorded in Q2. It must be noted that a weak figure will increase the chances the BoE will opt for a new bout of QE at their next meeting in November which previously has considerably weakened sterling’s value.

The pound’s next key support level is at €1.1111 (£0.9000) if it falls through this level traders feel we could see the rate drop to the early year lows of €1.0928

The pounds losses against the euro pushed sterling’s trade weighted index down to 78.3, its lowest level since late May and within close reach of the May low of 77.8.

Yet sterling managed to make gains against a broadly weaker dollar ahead of the Fed’s meeting next week. Investors saw a group 20 agreement to shun competitive currency devaluations to increase exports as a go ahead to sell off the greenback with many economists believing we will see the Fed increase their asset buying to help an already struggling economy. The next question will be whether the Bank of England follows Americas lead, which is resulting with the pound underperforming against majority of the other currencies, especially after the BoE minutes last week showed one policymaker, Adam Posen vote for an extension of QE by £50 billion.

"The market is gunning for the dollar going into the Fed meeting, but it's not all good for sterling and the easiest way to express a bearish view on sterling is against the euro," said Paul Mackel, currency strategist at HSBC.

"The GDP data is the main focus for sterling this week and if it disappoints the market will factor in a higher probability of more QE".

Sterling reached a day’s high of $1.5771 up from the earlier session low of $1.5661.

The US saw better then expected home sales in September which rose by 10%, this is the 2nd month in a row the US has seen an increase to this figure yet it overall is still down -19% against sales recorded a year ago, but it does go some way to show the sector may be stabilising.

Reports circulating yesterday showed foreign-exchange strategists stating the worst may still be yet to come for the pound which has depreciated over 5% against nine other most traded currencies since July. This is mainly due to the new coalition governments spending cuts which will hamper growth moving forward.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, 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.

QROPS Market Report : The Rise and Fall of Currency

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).

Gross Domestic Product in the EMU grew by 1% in the second quarter according to European Statistics agency. This was the strongest quarterly expansion since the second quarter of 2006. The troubled euro zone economy grew at the fastest pace in four years in the second quarter of 2010 buoyed by strong exports however consumer spending fell short of expectations. The statistics agency showed a growth of 1.9% compared with the same quarter in 2009.

Germany’s factory orders rose 3.4% in August from the previous month according to the data released by the nation’s economic ministry the report showed that new orders for capital goods were up by 6.7% whilst orders for consumer goods were down by 3.9%. Immediately after these reports EUR/USD saw little reaction trading at $1.3827 whilst the EUR/GBP gained in its momentum by jumping 10 pips on the release pushing to a new 5 month high at the 0.8730 barrier (€1.1454).

In the US however the ADP employment report showed that private payrolls dropped by 39k in September. This lead to a dollar sell-off amid fears that the non-farm payrolls report due to be released on Friday (8th Oct) will not be as promising as expected.

A debate has been taking place between U.S. Treasury Secretary Geithner and Chinese Prime Minister Wen as things get a little hotter in the currency battle pushing USD/JPY below 83. Geithner warned that he sees "damaging dynamic" in currency policies and called for more flexible emerging market currencies. However the Chinese government is enticing more countries across Europe in a bid to get them on their side in regards to currency reforms.

Wen blame the Euro’s strength on the Dollar weakness and not the Yuan.

In Brussels he promoted the continued growth in the relationship between China Europe stating that exports to the EU had risen by 42% in the first half of 2010. He stated that China had helped countries like Greece, Iceland, Spain, Portugal and Italy by buying their debt which has in turn had been pivotal in maintaining the stability of the Euro.

Wen admitted that there was a need to increase the value of the Yuan but would do this gradually in order to maintain the stability of the Chinese currency.

Although this is a change in tactic, it is likely to be a successful move by China, who is flush with cash and has the upper hand while Europe cannot afford to lose a big buyer of bonds at a time when sovereign debt troubles still turn some investors away.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for 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.

QROPS for those aged 50 to 55 years

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).

Weak consumer confidence figures, along with an increase in house prices and a dovish tone from Bank of England’s Posen saw Sterling on the back foot, yet again.

Earlier on in the exchanges, sterling had risen against a broadly weaker euro, as the

Ireland’s central bank put on a $34bn tag on bailing out Anglo Irish Bank under aworst case scenario.

We also had data from Nationwide showing rising house prices, contrary to the expectations of a third consecutive fall month on month, which supported the pound.

However, the pound was flirting with a four month low hit against the euro on Wednesday, as uncertainty about the economy and a possible fresh infusion of cash was talked about.

Bank of England’s Adam Posen, again reiterated that he had not decided on his vote towards further monetary easing, making the pound suffer, putting him in opposition to Andrew Sentence, who is in favour of rate hikes.

At the same time, we saw consumer confidence weaken more than expected in September. A Bank of England survey showed British lenders were expected to supply a broadly similar amount of credit in the last three months of 2010 as in the current quarter and expect default rates to fall.

The euro loos like it may have further room to gain against the pound given the pair broke below the 200-day moving average around €1.1648.

The euro fell against the dollar and yen yesterday, hurt by Ireland’s bail out scenario and also as investors booked profits ahead of month and quarter-end.

Traders also took some profit on the euro, after it hit a five month high versus the greenback on Wednesday and ahead of Fridays US Manufacturing data.

At 11.50am, the euro was up 0.1% against the dollar at $1.3635, having earlier pushed through an option barrier of $1.3650 to hit a five month high of $1.3676 on the EBS trading platform. There has been almost a 12% rise versus the dollar over the course of this quarter.

Fellow euro zone debtor, Spain, also lost a notch on its credit rating, being downgraded from AAA to AA1. Its government, unbowed by Wednesday’s general strike, unveiled details of tough austerity measures in their 2011 budget with much reduced borrowing in a drive to boost market confidence.

The Spanish downgrade was widely anticipated after similar moves by Standard & Poor’s and Fitch and investors were relieved that Moody’s said the outlook now looked stable.

Germany saw its unemployment level fall to its lowest level in more than 18 years in September. The jobless rate was 7.5% compared to 20% in Spain.

Thursday also saw the dollar struggling against the yen, amidst the growing fears of more Federal Reserve easing. The yen rose broadly on the last day of Japan’s fiscal half-year. Traders cited sporadic dollar selling against the yen by Japanese exporters, stop-loss selling and dollar selling by hedge funds.

This pushed the dollar just shy of its lowest level against the yen since Japan stepped in to curb yen gains two weeks ago, heightening expectations that they may well do so again.

US stocks did rise on Thursday as a sharp fall in weekly claims for jobless benefits and early signs of strength in September business activity, lifted economic confidence.

New US claims for unemployment benefits fell by 16,000 last week to 453,000. The Labour Department said, which was much steeper than had been expected and a sign the labour market may be strengthening modestly.

This was also backed up by stronger readings for regional business activity indexes in NYC and the US Midwest, seen as early indicators before national surveys on Friday and later next week.

The S&P 500 has gained more than 9% so far this month, supported by signs of economic stabilization and hopes the Federal Reserve will take extra steps to speed up the recovery. This strong data also helped give another boost for equities.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for 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.