Are things going to get better for your finances?Getty ImagesThe UK's rate of inflation has risen, but the chancellor, in response, promised that Britain would this year turn a corner. Rachel Reeves said cutting the cost of living was her "number one focus", following comments from Prime Minister Sir Keir Starmer who claimed that every minute not talking about it was "a wasted minute". It is a clear strategy ahead of local, Scottish and Welsh elections in May, driven in part by difficulties in boosting economic growth, and also in knowing there could soon be better news to tell. But many households are still struggling to cover essential bills, and others are unconvinced of improvement. Here are some of the key factors affecting family finances and whether government policies can, or do, have an impact. Energy prices set to fallWinter directs inevitable attention to household energy bills, but it will be spring when the government's flagship policy kicks in. In the Budget, the chancellor announced a £150-a-year cut to a typical domestic energy bill - but delivery of this simple pledge is a little more complex. While there is a reduction, some green policy costs are actually being shifted from bills to general taxation. While the move has received a warm welcome, taxpayers will still be covering some of the cost through other taxes. Investment in gas networks and electricity transmission will also mean costs added to bills. The latest forecast from respected energy consultancy Cornwall Insight is for the typical annual bill to fall by £138 in April. It says the Energy Company Obligation - which is being entirely removed - will cut about £62 from a typical annual dual-fuel bill, while 75% of the renewables obligation is being removed - which will take about £67 off the bill but this will be funded through general taxation instead. Labour's much-debated general election promise to cut household energy bills by £300 by 2030 remains under close scrutiny. Money saving is already ingrained at home, with batch cooking, more prudent selections on the thermostat, and warming the body rather than the whole home having become the norm for many people.
