The Boiler Upgrade Scheme grant will jump to £7,500 on 1 October 2025, a 50% increase on the current £5,000. That is real money for any homeowner weighing up a gas boiler replacement against a heat pump.
As reported by Which?, the scheme already covered air source and ground source heat pumps, biomass boilers, and flats using shared ground loops. The new figure brings England and Wales closer to Scotland’s existing £7,500 grant under Home Energy Scotland.
Who qualifies, and who doesn’t
You must own your home, landlords and new-build properties are excluded. The property must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation. In practice, that means most homes built before 2000 will need to top up insulation before applying.
Ofgem administers the scheme and caps installations at 60,000 per financial year. In 2023-24, just 24,000 vouchers were issued, well below the cap. The higher grant is built to close that gap.
What it costs a typical 3-bed semi
A typical air source heat pump installation for a 3-bed semi costs between £7,000 and £13,000, according to the Energy Saving Trust. With the new £7,500 grant, the homeowner’s share falls to between -£500 (if costs are at the low end and you claim the grant) and £5,500. The negative figure is hypothetical, the grant cannot exceed the installation cost, but it shows how close the economics now come.
Compare that with a new gas boiler: £2,500 to £4,000 installed, with no grant. The heat pump still costs more upfront, but running costs can undercut gas, especially if paired with a smart tariff like Octopus Cosy or EDF’s Heat Pump Tracker. Ofgem estimates annual savings of £100 to £300 versus gas on typical usage.
The catch, and what it misses
But the grant alone does not fix the UK’s heat pump problem. Installation is not the main barrier, awareness is. A 2024 survey by the Climate Change Committee found only 38% of homeowners had heard of the BUS. The government spent just £1.5m on marketing the scheme last year, compared with £50m on the Green Homes Grant’s doomed rollout.
There is also the insulation prerequisite. A heat pump works best in a home with low heat loss, typically EPC band C or above. Retrofitting solid-wall insulation can cost £10,000 to £20,000. The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. Homeowners may face two separate application processes.
What to do now
If your gas boiler is over 10 years old, start planning. Get an EPC assessment if you don’t have one. Check if your loft and cavity walls are insulated. Then apply for the BUS through Ofgem’s online portal from 1 October 2025. Vouchers are valid for 12 months, so you have time to find an MCS-certified installer.
The £7,500 grant makes heat pumps a viable option for more households. But without parallel investment in insulation and public awareness, the scheme risks being a well-funded secret. Homeowners who act early will lock in the higher grant before any future cap changes.
Frequently Asked Questions
Yes, as long as you replace it with an eligible heat pump or biomass boiler. You must own your home and have a valid EPC with no outstanding insulation recommendations.
It covers a significant portion, typically 50% to 100% of the installation cost for a standard 3-bed semi. However, additional costs for insulation or radiator upgrades are not included.
