The Autumn Budget 2026, published on 28 October, confirms the Boiler Upgrade Scheme grant will stay at £7,500 for air-source heat pumps, but tightens eligibility for homes off the gas grid. The Independent reports that the Chancellor also extended the Energy Price Guarantee at a lower level, meaning a typical household will save around £120 a year compared with the previous forecast. GOV.UK’s official summary confirms the grant figure and adds that the scheme will close to new applicants in March 2027.
What the Budget actually changes for your bill
The headline for most homeowners is the shift in bill support. The Independent’s analysis says the universal £400 discount is gone, replaced by targeted support for households on means-tested benefits. That means a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity will see its annual bill rise by about £80 compared with last winter, according to the paper’s calculations. The government’s own Autumn Budget 2026 summary puts the average saving at £95, a discrepancy that reflects different assumptions about usage and regional price variations.
But the bigger story is the grant landscape. The Boiler Upgrade Scheme remains at £7,500 for air-source heat pumps, but the Budget introduces a new requirement: homes must have a valid EPC of band D or above to qualify from April 2027. That is a significant change. Around 60% of UK homes are currently band D or below, according to government statistics, meaning many homeowners will need to invest in insulation or glazing before they can access the heat pump grant.
Who qualifies for help, and who doesn’t
The Independent notes that the Energy Company Obligation (ECO4) will be extended for another year, but with a narrower focus on low-income households in band E, F and G properties. The Green Homes Grant Local Authority Delivery scheme (HUG2) also continues, with £500m allocated for 2027-28. For a typical 3-bed semi, that could mean up to £10,000 towards insulation and a heat pump if your household income is below £31,000 and your EPC is band D or worse.
GOV.UK’s page confirms that the application window for HUG2 closes on 31 March 2027. The Independent reports that uptake has been slow, with only 12,000 homes upgraded so far out of a target of 60,000. The catch is that the eligibility criteria are complex: you must be on certain benefits or have a household income under the threshold, and your property must be off the gas grid or have a poor EPC rating. Homeowners in band C or above are not eligible for the new grant funding.
What it costs a typical 3-bed semi
For a typical 3-bed semi with an EPC band D, the Budget changes the maths. If you want a heat pump, you will first need to improve your EPC to band C or above to qualify for the £7,500 grant from April 2027. That could mean cavity wall insulation (£500-£1,500), loft insulation (£300-£600) and possibly new glazing (£4,000-£8,000). The total upfront cost could be £6,000-£10,000 before the heat pump itself. Without the grant, an air-source heat pump installation costs £8,000-£14,000.
The Independent’s analysis suggests that the government expects homeowners to fund these improvements through green mortgages and low-interest loans, but no new subsidised loan scheme was announced in the Budget. The only new funding is a £20m pot for local authorities to pilot ‘one-stop shop’ advice services, which will not directly reduce costs for most households.
The “but” moment: missed opportunities
What this misses is the scale of the challenge. The Climate Change Committee has said that the UK needs to install 600,000 heat pumps a year by 2028 to meet its carbon targets. The Budget’s own forecasts, published by GOV.UK, show that the Boiler Upgrade Scheme is expected to fund just 45,000 installations in 2027-28, a fraction of the required rate. The Independent quotes a industry source saying the new EPC requirement will “slow uptake at exactly the wrong moment.”
For homeowners, the practical impact is that the grant is still worth having, but the window is narrowing. If your home is band D or below, you need to start insulation work now to be ready for the April 2027 deadline. If you are on a low income, check your eligibility for ECO4 and HUG2 before the March 2027 cut-off.
What to do next
First, check your EPC rating online at gov.uk, it takes two minutes and tells you what improvements are needed. Second, if you are on a low income or benefits, contact your local council’s energy advice service to see if you qualify for ECO4 or HUG2 funding before 31 March 2027. Third, if you are considering a heat pump, get a quote from an MCS-certified installer now, because demand will rise as the deadline approaches. The Boiler Upgrade Scheme application portal is open, but you must have a valid EPC and an installation quote before you apply. The grant is paid after installation, so you will need to cover the upfront cost.
Frequently Asked Questions
No, the grant remains at £7,500 for air-source heat pumps. However, from April 2027, homes must have an EPC rating of band D or above to qualify, which means many homeowners will need to invest in insulation first.
Yes, both schemes continue, but the application window for HUG2 closes on 31 March 2027. Eligibility is means-tested and focused on low-income households in properties with EPC band D or below.
The Independent estimates a typical 3-bed semi will pay about £80 more per year, while GOV.UK puts the average increase at £95. The difference reflects regional variation and usage assumptions.
