QROPS update 30th August 2011 Pension income drawdown & Foreign exchange QROPS and 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).

A difficult week last week for sterling culminated in sterling continuing to lose ground across

the board on Friday. Sterling fell to a session low against the dollar following Fed chairman

Ben Bernanke speaking publicly at the Jackson Hole press conference. Bernanke offered no

news on fresh stimulus to stimulate the US economy and this led to dollar strength due to its

safe haven status.

The markets had been anticipating Bernanke’s speech all week hoping that he might make

specific reference to further monetary easing but they were disappointed. In actual fact

Bernanke said that the Fed had tools available to them but gave no indication when or if

they would decide to use them.

In the UK the ‘drip drip’ of poor data we had seen all week last week showed no sign of

abating following the release of UK growth in the second quarter. The 0.2% reading was

bang on consensus and offered no support to the ailing pound. Sterling was down around

0.3% for the day on Friday at a session low of $1.6236, falling from around $1.6300

before Bernanke's speech. Technical analysts highlighted support from sterling's 55-day

moving average at $1.6224.

Against the euro it was a very similar story, the poor UK data put pay to the recent sterling

strength with GBP/EUR falling significantly during the week, closing on Friday at €1.1275

having started on the plus side of €1.1450. Even without the poor data the pound has also

been hampered by the market's view that UK interest rates are likely to be kept on hold

through 2012, with some thinking more quantitative easing may be needed to support the

British economy.

Bank of England policymaker Martin Weale told a regional newspaper on Friday he does not

see any need for quantitative easing at the moment, but does not rule it out, and would

engage in further stimulus if the economy worsened substantially.

IN THE UK

• Sterling loses ground across the board on Friday
• The GBP/EUR falls to €1.1260, the lowest level seen since August 10th.
• The UK’s 2nd release of Q2 GDP figures was confirmed at 0.2%, overall matching consensus but with a slight downward revision to production industries offset by marginally stronger service sector growth.
• The data did little to change investors overall view of the UK economy and the pound remains under pressure.
• A slight relief to the pound this morning came in the form of Mortgage Approvals for July, the figure rose to 49.23k, above the consensus of 49k

ELSEWHERE

• Initially on Friday the US dollar gained against sterling but later reverses gains moving from the low of $1.6207 to end trade near $1.6345.
• US personal spending increases to 0.8% in July.
• Relief that the damage inflicted by the recent hurricane on the US east coast was less serve then first expected, this provides a major boost for risk assets.
• The Dow Jones rises 255 points to close at 11,539.
• In the Eurozone Greece’s biggest banks Eurobank EFG and Alpha Bank have announced they are to merge, this is positive news for struggling Greece as the government have encourage banks to pool resources to help deal with the current debt crisis.

DATA TO LOOK OUT FOR

• At 3.00pm this afternoon Consumer Confidence figures in the US are released. The markets are expecting a dramatic fall to 52.2 from 59.5 as the struggling US economy begins to hit the consumer.
• Minutes from the Fed’s August 9^th interest rate decision meeting are released.
• Overnight Gfk Consumer Confidence figures in the UK are released, the figure is expected to remain around the -30 mark.

 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.