The economic impact of natural disasters in the US 

For those living in vulnerable areas to extreme weather disasters, recent years have seen some of the worst disasters. In 2024, we have seen severe weather disasters such as, the floods in Afghanistan- Pakistan, typhoon in Japan, the recent hurricane in Florida and more. Now, hurricane Milton is causing severe warnings and evacuations in Florida as they still face the outcome of their last hurricane, Helene. 

These disasters cause destruction to lives, families, property and more and the cost of repairing this once they can is substantial. We have taken a dive into the cost to the US economy, businesses and individuals when they are hit by a natural disaster 

The cost of weather disasters in the US 

Between 2020-2022 there were 60 natural disasters which cost over $1 billion in losses. With the worsening climate change, 2023 saw a record number of weather and climate disasters. In 2023, flooding events alone caused a total of almost $7 billion in damages in the U.S. 

The cost of property damage and destruction of infrastructure are often the most clear and immediate impacts, as homes, buildings, roads and more are damaged or destroyed. The economic impact also extends to business interruption, loss of jobs, reduced tourism and more which lead to further financial strain. 

The costs of repairing and rebuilding 

Hurricane Katrina in 2005 caused an estimated $125 billion in damage, with widespread destruction to property and infrastructure across New Orleans. The storm crippled businesses and left thousands without jobs, contributing to long-term economic stagnation in the region. Housing markets are heavily impacted by property damage. After Hurricane Katrina, housing prices in New Orleans dropped significantly as many properties were either destroyed or made uninhabitable. 

Not only did the storm Katrina impact infrastructure but also the essential businesses were halted. Katrina impacted up to 19% of the total US oil production as 24% of the country’s natural gas supply is housed in or around areas impacted by the storm. 20 offshore rigs underwent significant damage causing refineries to halt production. This was the first time in the country’s history that the national average gas price went over $3. 

Who pays for repairs? 

Contributions from the government  

Federal as well as local government are often the first to respond after a disaster, they will allocate money for emergency relief and reconstruction. Agencies like FEMA (Federal Emergency Management Agency) provide financial assistance to individuals, municipalities, and states to cover the cost of rebuilding infrastructure and homes. In 2027, the hurricane season brought 3 large disasters, the federal relief packages amounted to $130 billion. 

At the state and local levels, additional funds are provided, though these governments often struggle to meet the demands of large-scale recovery due to budget limitations. This has led to calls for increased federal support and better pre-disaster planning. 

Insurance Companies 

If you are a homeowner and you have property insurance you can file claims to cover damage to homes, cars, and other possessions. Unfortunately, not all areas of the US are equally insured, such as those areas prone to specific types of disasters e.g. hurricanes and wildfires. Insurance premiums have increased the prices due to the heightened risk.  

For example, after Hurricane Katrina, insurance premiums in coastal areas of the Gulf and Atlantic soared by as much as 20-30% in some regions. 

Some homeowners may not be able to afford sufficient coverage, leaving them vulnerable to significant financial losses after a disaster. Additionally, many policies don’t cover flooding unless a separate policy is purchased, as seen in the extensive uninsured losses from Hurricane Harvey, where only about 20% of homeowners in the Houston area had flood insurance. 

The impact on small businesses 

A 2017 FEMA report highlighted that 40% of small businesses never reopen after a disaster. In these cases, both individuals and businesses are forced to rely on personal savings, loans, or government assistance, which may not be sufficient to cover the full extent of the damage. 

Some of the hidden costs of weather disasters 

Employment: Natural disasters can have various effects on the economy of the local area which ripple through multiple sectors. With productivity down, businesses begin to struggle and even more so if their property has been damaged or destroyed. The money to restore the business may not be immediately available, causing the owners and all staff to be without employment for a prolonged amount of time.  

Housing market: When disasters hit, and if the area has been hit multiple times, it is likely to deter future residents. Currently, Florida is facing its second large hurricane within a month, this will likely persuade many to relocate and others to delay or cancel their move into the area. This will have a substantial impact on the housing market.  

Investments: For investors, an area prone to natural disasters will likely deter any development in the area. This can include property investment as well as developing the area with more businesses.  

Selecting the right platform is a bit like building a house: if the foundations aren’t stable then you’re in serious trouble further down the line.

I’m increasingly seeing advisers considering switching platforms looking to financial stability as that key foundation stone from which to build.

Today’s advice platform market is characterised by oversupply and frequent regulatory change, leaving a key problem for advisers to overcome – long-term stability.

A financially robust platform reassures advisers their chosen provider will endure market consolidation, invest in continuous innovation and maintain high service levels, while being able to adequately adapt to the pace of regulatory change.

Financial stability is about more than survival; it’s about thriving in a competitive market

Consumer Duty further underscores the need to take a more long-term approach. Advisers must ensure their platform partners can consistently meet these regulatory expectations, safeguarding consistency in service quality and good client outcomes.

Financial stability is about more than survival; it’s about thriving in a competitive market.

A stable platform is not a static platform. Instead, it’s a reliable partner that adapts, supports advisers’ evolving needs and provides the infrastructure to keep pace with technological advancements.

Without assessing a platform’s financial stability and ability to invest in development, advisers risk partnering with a platform that could struggle to sustain service quality or keep up with industry innovations, potentially putting their client relationships and business growth at risk.

Contrary to some opinions, advisers are open to exploring new platforms, but they generally need a trigger to make such a significant switch

Contrary to some opinions, advisers are open to exploring new platforms, but they generally need a trigger to make such a significant switch.

Realistically, a firm will only shift large volumes of business when there’s a compelling reason — which are often realised by concerns about their current platform’s financial health and levels of investment.

Consistency of service, back-office connectivity, and digital automation and experience give advisers an edge in an industry where marginal gains can make a real difference.

If doubts arise about a platform’s financial security, advisers should question whether they will continue to see these cornerstones of platform efficiency maintained.

Switching usually requires significant push factors that prompt advisers to consider their options. These can include long call wait times, processing delays, transaction errors and lack of accountability, all problems that damage client relationships and erode trust.

Platform charges have increasingly become a secondary consideration

Platform charges have increasingly become a secondary consideration. Charges across the industry are highly competitive, and advisers now view them as relatively uniform. Instead of focusing solely on costs, advisers weigh charges against a broader range of factors, like digital experience, investment choice, service model and overall value for money.

Platform charges represent only a small portion of the total cost of advice, which includes adviser fees and investment management costs. So, with cost differences between platforms generally minimal and one eye on Consumer Duty, advisers are beginning to prioritise the long-term viability of a platform over short-term savings.

With a focus on value mandated by Consumer Duty, advisers are gravitating towards platforms that have greater resources at their disposal. These are more capable of investing in reliable service and support, which ultimately benefits clients and helps advisers to scale their businesses.

Why onboarding matters

A seamless onboarding experience is essential for affirming advisers’ confidence in their decision to switch platforms. This process is their first impression of the new platform and sets the tone for their platform experience.

A well-designed onboarding process should be efficient, transparent and supportive, according to the individual needs of advice firms. This process involves not just the technical aspects of transferring data and setting up accounts but also clear communication, training and ongoing support.

Delivering all this requires investment, not just at the start, but as part of a continuous review process.

Effective onboarding can transform what is seen as a daunting process into a smooth, positive experience

By minimising the friction involved in switching and providing comprehensive assistance during the transition, platforms can reduce perceived barriers to change.

This proactive approach instils a sense of trust and reliability, which fosters long-term loyalty, making advisers more likely to stay with the platform and recommend it to others. Effective onboarding can transform what is seen as a daunting process into a smooth, positive experience.

While multiple factors influence platform selection and switching, we are seeing the emergence of financial stability as a critical element.

In an era of market oversupply and rapid technological change, advisers are increasingly recognising and seeking out platforms that are operationally efficient and financially secure.

Understanding these dynamics allows platforms to better position themselves to meet the evolving needs of advice firms and their clients to deliver mutual future success.

Ranila Ravi-Burslem is intermediary distribution director at Scottish Widows

HOUSEHOLDS should be aware of rules surrounding this common item which could land you a £300 fine or even a criminal record.

Local authorities can issue fines for illegal log burner use in England.

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This rule was introduced by the Department for Environment and Rural Affairs (DEFRA) to reduce air pollution and has been in place for over two decades.

But councils can issue fines under new rules brought in last year.

Last year, the government instructed local authorities to consider using powers in the 2021 Environment Act to issue on-the-spot civil penalties.

Local authorities can issue financial penalties of between £175-£300 for smoke emissions from chimneys in smoke control areas in England. 

You could also get a fine of up to £1,000 for using unauthorised fuel in an appliance that’s not on the exempt list.

In some cases, if the situation goes to court, then fines could be as high as £5,000 for repeat offenders, as well as an additional £2,500 for every day the breach continues.

If you are confused about what types of appliances you can use it is always worth ringing your local council and asking for help.

How to avoid being fined

It is not against the law to use one of these heating devices, but there are certain regulations in place for households.

For example, if you live in a smoke control area, wood burners can not emit more than three grams of smoke per hour.

A smoke control area is a place where people and businesses are not allowed to emit a large amount of smoke from a chimney.

This rule was introduced by DEFRA to reduce air pollution and has been in place for over two decades.

You can find out if you live in a smoke control area by using an online map created by the department, this can be found by searching https://uk-air.defra.gov.uk/data/sca/.

For example, people who live in Slough with the SL16 postcode are in a smoke control area meaning how much fumes their appliances can emit is limited.

Residents who live in these types of areas can use log burners, but the appliance must first be approved by DEFRA.

You can find a full list of appliances and fuel which are safe to use by visiting, https://smokecontrol.defra.gov.uk/fuels-php/.

For example, it is safe to use some kinds of smokeless logs such as Aimcor Excel briquettes.

Families who use logs for fire should look for the ‘Ready to Burn’ logo on fuel packaging.

This means the fuel has less than 20% moisture and complies with DEFRA’s regulations.

If you buy a new log burner then it must adhere to Ecodesign rules to reduce smoke and pollutant emissions.

It is always worth checking with your manufacturer if a wood burner adheres to new ecodesign rules.

The reminder comes as many Brits look for alternative ways to heat their home this winter.

Energy costs have risen by £149 for the average household this month after Ofgem’s new price cap came into force.

Cuts to the Winter Fuel Payment also mean that around 10million pensioners are set to miss out on up to £300 in fuel support.

MILLIONS of pensioners will want to mark a key date in their diary for when they will receive the Winter Fuel Payment.

For the first time this year, the benefit, which is worth up to £300, will not be universal and only available to people claiming certain support.

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Previously anyone over State Pension age qualified for the payment designed to soften the pinch of energy bills during the colder months.

Most households do not need to apply for The Winter Fuel Payment and will automatically be paid the cash.

If you qualify, you’ll get a letter telling you:

• How much you’ll get
• Which bank account it will be paid into

Payments are £200 for eligible households or £300 for eligible households where someone is aged over 80.

If you do not get a letter or the money has not been paid into your account by January 29, 2025,  contact the Winter Fuel Payment Centre.

The deadline for you to make a claim for winter 2024 to 2025 is 31 March 2025.

By this date, the payments will be processed for those who qualify, with most receiving the money directly in their bank accounts.

For the vast majority of pensioners, the money will land in their bank accounts without the need for action, as long as they have been receiving certain benefits such as Pension Credit, Income Support, or Universal Credit.

If you do not receive your Winter Fuel Payment by the January 29 deadline, it’s important to act promptly.

You will need to contact the Winter Fuel Payment Centre on 0800 731 0160 to make a claim.

Keep in mind, the deadline for submitting a claim for winter 2024-2025 is March 31, 2025.

The payment is now restricted to pensioners who are claiming certain means-tested benefits. This includes:

• Pension Credit (a key qualifier)
• Universal Credit
• Income Support
• Income-related Employment and Support Allowance (ESA)
• Income-based Jobseeker’s Allowance (JSA)

In particular, those claiming Pension Credit should make sure to apply for it, as this benefit is the gateway to receiving the Winter Fuel Payment.

Pension Credit can top up your weekly income to £218.15 if you’re single or £332.95 for couples.

Notably, over 800,000 pensioners are missing out on this benefit, and without it, they won’t qualify for the Winter Fuel Payment.

HOW TO CLAIM

If you think you are eligible, it’s essential to claim Pension Credit as soon as possible.

The latest claims can be backdated for up to three months, with the final date to claim for the 2024-2025 Winter Fuel Payment being December 21, 2024.

If you’re already receiving Pension Credit or another qualifying benefit, the Winter Fuel Payment will be paid to you automatically.

With over 800,000 pensioners potentially missing out on Pension Credit, it’s critical for those eligible to act now.

Not only will this ensure you get the Winter Fuel Payment, but it can unlock additional support throughout the year.

If you don’t get your Winter Fuel Payment by January 29, 2025, don’t delay – contact the Winter Fuel Payment Centre and make your claim before the deadline.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

TENS of thousands of pensioners are set to get tax demands this year for the first time since they retired.

A new freedom of information request by LCP Partners, reveals that nearly 700,000 people received a bill in the post last year, for an average of £665 each. 

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This was an increase of over 120,000 people compared with two years earlier.

One reason given for the rise is the year-on-year freeze in the value of personal allowance, coupled with a steady increase in the value of the state pension.    

The personal allowance threshold, which is the rate at which people start paying tax, has been frozen at £12,570 since April 2021.

The government freezes tax thresholds as a way to raise extra cash without directly increasing taxes.

But as wages or income from pensions rises each year, more people are being dragged into paying tax, or into higher tax brackets.

Steve Webb, partner at pension consultants LCP, told The Sun the “long-term freeze” in the value of the tax-free personal allowance could be financially damaging for pensioners.

He said: “Although an average bill of £665 may not sound very large, it could be the equivalent of about three weeks’ pension and a pensioner whose income is only just above the tax threshold may not have such a sum readily available”.

It is possible that the number of pensioners set to receive tax demands could rise over the coming years.

This is due to the triple lock, which means the payment made to those aged 66 and over rises every April by the highest out of inflation, the average UK wage increase, or 2.5%.

We don’t know yet what the rise will be but the ONS is set to release its inflation figures next week which should give us an indication.

Internal Treasury calculations, previously published by BBC, show that changes would take the state pension to around £12,000 in 2025/26, from £11,501 currently.

This could lead more and more elderly people into paying tax on their pensions.

What to do if you get a letter?

HMRC is sending out letters to thousands of pensioners as part of its “simple assessment” process which assesses who needs to pay what tax.

HMRC previously said that the letters going out will include a detailed calculation of any tax due for income they received between April 2023 and April 2024.

They’ll need to pay what they owe using Simple Assessment.

If you do get one of the letters, don’t stress, as you have until January 2025 to pay the bill.

You can even pay the fee using instalments as long as it’s fully paid by the deadline.

There is an online guide Simple Assessment guide for pensioners with more information for pensioners who receive a demand.

Is there anything I can do to avoid it?

Laura Suter, director of personal finance at AJ Bell, previously told The Sun that pensioners “looking to reduce their tax bill need to think about how they can maximise their tax-free income”.

“For example, any withdrawals made from their ISAs will be free of any tax. so they can use that pot of money to boost their income without impacting their tax bill.”

An ISA is a type of savings account in which you can save up to £20,00 a year tax-free.

Ms Suter also suggested that couples can organise their finances so they ensure they are each making use of their tax-free allowances, which might involve moving money or assets between themselves.

Helen Morrisey, head of retirement analysis at Hargreaves Lansdown, added that pensioners might want to use some of their pension to top up their income.

She said: “Most people can access 25% of their pension as a tax-free lump sum so they may decide to use this to top up their income without pushing up their tax bill.”

However, she also warned that pensioners below the personal allowance are going to find it increasingly difficult to avoid paying income tax in the coming years.

The finance expert added: “A full new state pension hits just over £11,500 per year and even relatively modest 3.5% annual increases would see people pushed over the threshold by the time the threshold freeze ends.”

SIR Keir Starmer has refused to rule out a National Insurance hike for employers despite Labour’s manifesto vowing not to do so.

Tory leader Rishi Sunak grilled the PM three times, demanding to know if he would stand by his pledge.

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But Sir Keir dodged the questions, leaving the door wide open for a tax raid on employers.

Labour’s manifesto stated that “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income tax, or VAT” .

In their first exchange at Prime Minister’s Questions after party conferences season, Mr Sunak said: “Can he confirm that when he promised not to raise income tax, National Insurance or VAT that commitment applies to both employer and employee national Insurance contributions?”

Sir Keir replied: “As he well knows I am not going to get drawn on decisions that will be set out [at the Budget].

“We made an absolute commitment in relation to not raising tax on working people.

“He of course was the experts’ expert on raising taxes.”

Asked the same question again, Sir Keir would only go so far as to say that he would stick to the promises made in Labour’s manifesto.

The PM also refused to rule out changing fiscal rules to increase Budget spending power.

It comes amid speculation Rachel Reeves could do to potentially unlock up to £57bn in additional spending on infrastructure.

Replying to Mr Sunak, Sir Keir said: “This is literally the man who was in charge – 14 years they crashed the economy. What did they leave? A £22 billion black hole.”

The Tory leader then told the Commons: “He has opened the door to raising employer National Insurance contributions including on pensions and fiddling the figures that he can borrow more.”

Shadow Chancellor Jeremy Hunt also hit out on Twitter: “The Prime Minister has today left the door open to the Labour Party breaking their promises to the British people by raising taxes and increasing borrowing, leaving future generations to pick up the bill and risking higher interest rates.

“Keir Starmer and Rachel Reeves should have had the courage and conviction to be honest about the tax and borrowing plans they always planned.”