QROPS update 12th January 2012 Pension Drawdown and QROPS & QNUPS

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 pensions or 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).

IN THE UK

• The Bank of England are expected to keep interest rates on hold this afternoon at the monthly interest rate decision meeting and will maintain its £275bn bond purchase target.
• UK services and manufacturing gauges unexpectedly rose last month, showing the economy gained a little strength (but only modestly); however the BoE has indicated that the economy may in fact be stagnating as recovery is impaired by the European debt crisis.  Sterling opens trading today against the euro at €1.2036, nearly a cent down on the start of the week.
• Debt worries in the Eurozone weighed on the London markets yesterday as disappointing economic data dampened the mood and pulled the FTSE lower.
• Today sees an illustration of how Britain can be affected by the Eurozone crisis as RBS announces 3,500 jobs losses.  The European crisis has forced securities firms to scale back or close divisions that trade European equities – and the UK and The City is acutely affected by this shift. 

ELSEWHERE

• Although showing growth of approximately 3% over the year, the German economy worried the markets by posting a contraction of 0.25% in an unofficial release.  Schulz, a senior economist at Berenburg, sees a ‘25% chance of the euro crisis remaining out of control longer…spiralling out of control with a series of sovereign and bank defaults’.  In such a scenario, Germany would enter a major recession.
• The euro suffered from heightened risk aversion as some investors may expect the euro to drop should the union break up.
• Rumours have surfaced that the French government had be notified by S&P that a downgrade of its AAA status is looming.
• Despite morning gains against both GBP and USD, the euro ended the day at $1.2698 against the greenback, with losses compounded on the back of EU growth forecasts.
• USD saw a definite flight to safety in light of these concerns over a European recession.  USD moved to a 16 month high against euro, whilst cable fell to a three month low of $1.5308.
• Officials from the Fed reserve are undecided on the need for further easing. Sung Won Sohn, former chief economist at Wells Fargo suggests that “ despite recent signs of improvement, Fed officials are very vigilant about the economic recovery continuing and improving,”
• Asian stocks fell for the first time in four days, while gold rose as data showed slowing demand for Japan’s exports. 
• Oil rallied 0.5% to $101.38 a barrel, while natural gas slumped to a 28-month low – easing the pinch on domestic costs a touch.
• The New Zealand dollar weakened against 15 major currencies but still remains at an inflated value of 1.9228 against the pound  - this slide is largely due to a drop in the value of commodity prices according to ANZ bank. 

DATA TO LOOK OUT FOR (all times GMT)

• Today both the ECB and MPC deliver their monthly rate decisions.
• The United States release both core and non-core retail sales data at 13:30, with both expected to have increase by 0.1%.
• US Unemployment Claims are also expected to climb.

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.