What the Home Upgrade Grant Is and Why It Matters in 2026
The Home Upgrade Grant (HUG) has delivered energy efficiency improvements to over 50,000 low-income households across England since its launch, channelling hundreds of millions of pounds into upgrading some of the country’s least energy-efficient homes. Running in its second phase as HUG2, this government-backed scheme specifically targets off-gas-grid properties — homes that don’t use mains gas for heating — occupied by households on low incomes or living in fuel poverty. If your home has an Energy Performance Certificate (EPC) rating of D, E, F, or G, and you meet the income criteria, the Home Upgrade Grant could fund a significant package of insulation, heating, and renewable energy measures at little or no cost to you.
Understanding how the scheme works, what it covers, and how to access funding is essential before any work begins. This guide walks you through everything: eligibility rules, the measures available, costs where they apply, installation processes, and how to make the most of what’s on offer in 2026.
How the Home Upgrade Grant Works
The Home Upgrade Grant is administered by local authorities across England, with funding provided by the Department for Energy Security and Net Zero (DESNZ). Rather than applying directly to a central government body, you apply through — or are referred to — your local council, which manages delivery in your area.
Local authorities receive ring-fenced funding allocations and then identify eligible households either through active outreach, referral partners (such as housing associations, GPs, or food banks), or direct applications from residents. Once your eligibility is confirmed, a Retrofit Assessor visits your home to carry out a full assessment. This assessment determines which measures are technically suitable for your property and what the expected energy savings will be.
The scheme operates on a whole-house retrofit approach, meaning the assessor looks at your home as a system rather than installing isolated measures. This is important — it prevents scenarios where, for example, a heat pump is installed in a poorly insulated home, which would be inefficient and costly to run. Measures must be installed in accordance with PAS 2035, the British Standard for whole-house retrofit, ensuring quality and protecting homeowners from substandard work.
Funding covers both the cost of the measures and the installation labour. Eligible households — broadly those with a combined household income under £36,000 per year, or those in receipt of certain means-tested benefits — typically pay nothing at all. Households slightly above the income threshold may be asked to contribute a proportion of costs, though the grant still covers the majority.
Eligibility Requirements for the Home Upgrade Grant in 2026
Meeting the eligibility criteria is the first hurdle, and it’s worth checking these carefully before pursuing an application. The scheme has two distinct eligibility routes:
Route 1 — Income-Based Eligibility
- Your property must be off the mains gas grid (no gas boiler or gas central heating)
- Your home must have an EPC rating of D, E, F, or G
- Combined household income must be £36,000 or below per year
- The property must be in England (Scotland, Wales, and Northern Ireland have separate schemes)
- You must be the owner-occupier, or a private tenant with landlord consent
Route 2 — Benefits-Based Eligibility
- Same property and EPC requirements as Route 1
- At least one household member receives a qualifying benefit such as Universal Credit, Pension Credit, Child Tax Credit, Working Tax Credit, Income Support, or Housing Benefit
- No income cap applies if you’re on qualifying benefits — the benefit itself confirms eligibility
Notably, the off-gas-grid requirement is a defining feature of HUG that distinguishes it from schemes like ECO4. Homes heated by oil boilers, LPG, direct electric heating, or solid fuel are all potentially eligible. Homes already connected to mains gas are not, as they are served by other funding routes. [INTERNAL: ECO4 Scheme Guide — for gas-connected homes that may qualify under the ECO4 programme instead]
Measures Covered by the Home Upgrade Grant
The range of measures available under HUG2 is broad, and the package your home receives will depend on what the retrofit assessment recommends. The scheme prioritises measures that deliver the greatest energy savings relative to cost, and insulation is almost always the starting point.
Insulation Measures
- Solid wall insulation — either external or internal, for homes without cavity walls
- Cavity wall insulation — where walls have an unfilled cavity
- Loft insulation — topping up or installing where absent or below 100mm
- Underfloor insulation — for suspended timber floors
- Flat roof insulation and room-in-roof insulation where applicable
- Insulated doors and glazing in some cases, as part of a wider package
Low-Carbon Heating and Energy Measures
- Air source heat pumps — the most commonly installed heating measure under HUG
- Ground source heat pumps — where land area and ground conditions permit
- Solar photovoltaic (PV) panels — to generate electricity and reduce running costs
- Solar thermal systems — for hot water production
- Heat pump-ready heating controls and smart thermostats
- Battery storage systems — increasingly included alongside solar PV
- Mechanical ventilation with heat recovery (MVHR) — in highly insulated homes to maintain air quality
It’s worth noting that the assessor will not necessarily recommend every measure listed above. Your package is tailored to your home’s specific characteristics, its current EPC rating, and the energy savings achievable. A typical HUG package for a rural detached bungalow heated by oil might include solid wall insulation, loft insulation, and an air source heat pump, bringing the property from an EPC E to a B or C rating in one programme of works.
How Much the Home Upgrade Grant Covers in 2026
The grant values under HUG2 are substantial, reflecting the significant cost of whole-house retrofit work. The scheme sets maximum funding thresholds per property type, though actual costs vary by measure, property size, and regional labour rates.
| Property Type | Maximum Grant Value | Typical Measures Funded |
|---|---|---|
| Detached house | Up to £25,000 | Solid wall insulation, heat pump, solar PV |
| Semi-detached house | Up to £20,000 | Cavity wall insulation, loft insulation, heat pump |
| Terraced house | Up to £17,000 | Solid wall insulation, loft insulation, heating controls |
| Bungalow | Up to £22,000 | Solid wall insulation, loft insulation, air source heat pump |
| Flat (ground or top floor) | Up to £14,000 | Underfloor or ceiling insulation, heating upgrade |
| Park home / mobile home | Up to £10,000 | Insulation measures, heating controls |
These figures represent the maximum available grant funding per property. In practice, the work is tendered and managed by the local authority, so you won’t see individual invoices in most cases — the grant pays installers directly. Where a household contribution is required (for those slightly above the income threshold), this is typically capped at 25–33% of total project costs.
Individual Measure Cost Breakdown
| Measure | Typical Installed Cost | Annual Energy Saving (Estimate) |
|---|---|---|
| External solid wall insulation (mid-terrace) | £8,000 – £13,000 | £400 – £600 per year |
| Internal solid wall insulation | £5,500 – £8,500 | £300 – £500 per year |
| Cavity wall insulation | £1,500 – £3,000 | £150 – £250 per year |
| Loft insulation (top-up to 270mm) | £300 – £700 | £150 – £200 per year |
| Air source heat pump (3-bed house) | £10,000 – £15,000 | £500 – £1,200 per year (replacing oil) |
| Solar PV (3kWp system) | £5,000 – £7,500 | £350 – £500 per year |
| Battery storage (5–10kWh) | £3,500 – £6,000 | £200 – £400 per year (additional saving) |
The combined impact of a full HUG package can be dramatic. A property moving from EPC F to EPC B might see annual heating bills fall by 60–75%, representing savings of £1,500 to £2,500 per year for many households — a life-changing outcome for those in genuine fuel poverty.
Benefits of the Home Upgrade Grant
The Home Upgrade Grant delivers benefits that extend well beyond simply lower energy bills, though those financial savings are significant in themselves.
Financial Benefits
Eligible households receive retrofit packages worth an average of £14,000 to £18,000 at no direct cost. Even where a contribution is required, the grant heavily subsidises work that would cost tens of thousands on the open market. The energy bill savings generated typically exceed any household contribution within two to three years, and continue for the lifetime of the measures — solid wall insulation, for example, carries a life expectancy of 25–36 years.
Property Value Improvement
Research from Rightmove and Nationwide has consistently shown that improving a property’s EPC rating increases its market value. Moving from EPC E to EPC B or C can add between 6% and 14% to a property’s value, depending on location and property type. For a home worth £200,000, that represents an uplift of £12,000 to £28,000 — substantially more than the cost of the works themselves.
Health and Comfort Improvements
Cold, damp homes are strongly associated with respiratory illness, cardiovascular disease, and mental health difficulties. Proper insulation reduces condensation and mould growth, while a reliable, low-carbon heating system maintains consistent temperatures. The NHS estimates that cold homes cost the health service over £1.4 billion per year in England alone — HUG measures directly reduce this burden at household level.
Environmental Impact
A typical oil-heated detached home produces around 6–8 tonnes of CO₂ per year from heating alone. Replacing an oil boiler with an air source heat pump, combined with solid wall insulation, can reduce this to 1–2 tonnes annually — a reduction of 75% or more. For households motivated by environmental concern, this is among the most impactful individual actions available.
How to Choose the Right Measures for Your Home
While the retrofit assessor will recommend a package based on technical evidence, understanding the decision framework helps you engage meaningfully with the process and advocate for your home’s specific needs.
Fabric first is the guiding principle of PAS 2035. This means insulation and draught-proofing should be installed before or alongside any new heating system. Installing a heat pump in an uninsulated home is a false economy — the heat pump runs less efficiently, bills remain high, and the full carbon savings are never realised. If your home has solid walls (common in pre-1920s properties), solid wall insulation is almost certainly the single most impactful measure available to you.
When considering heating upgrades, the key decision for off-gas homes is typically between air source heat pumps and other options. Air source heat pumps work well in well-insulated homes and are the most common HUG-funded heating measure. They require a Seasonal Coefficient of Performance (SCOP) of at least 2.5 to be cost-effective, which is achievable in most properties once adequate insulation is in place.
Solar PV is worth pushing for if your roof has a south, southeast, or southwest-facing aspect with minimal shading. A 3kWp system generates approximately 2,600 kWh per year in the south of England and 2,200 kWh in the north — enough to cover a significant proportion of household electricity demand. Paired with a heat pump, solar PV can dramatically reduce running costs.
If your home has a listed building designation or sits within a conservation area, some external measures may face planning restrictions. Discuss this with your local authority early, as internal alternatives are usually available. [INTERNAL: Great British Insulation Scheme Guide — for households seeking insulation-only funding without the full retrofit package]
The Home Upgrade Grant Application and Installation Process
Understanding what happens from first contact to completed installation removes uncertainty and helps you prepare practically for works that can be disruptive if unexpected.
- Contact your local authority. Search for your council’s HUG or energy efficiency team, or use the government’s Simple Energy Advice service to find your local scheme. Some councils proactively contact eligible households — if you receive a letter, it is worth taking seriously.
- Initial eligibility check. A brief phone or online assessment confirms whether you meet the income, tenure, and EPC criteria. You may need to provide proof of income, benefits, or a recent energy bill showing your property’s heating fuel type.
- Retrofit Assessment. A qualified Retrofit Assessor (accredited under TrustMark or equivalent) visits your home, typically spending one to two hours. They examine insulation levels, heating systems, windows, doors, and ventilation. They also review your EPC and may conduct additional surveys such as a borescope inspection of cavity walls.
- Retrofit Coordinator appointment. Under PAS 2035, a Retrofit Coordinator oversees the design and management of your package. This person acts as your advocate, ensuring the proposed measures are appropriate and that contractors meet quality standards.
- Design and approval. The Retrofit Coordinator produces a Medium-Term Improvement Plan, which maps out all recommended measures. You review and approve this before any work is tendered.
- Contractor appointment. The local authority appoints TrustMark-registered contractors for each measure. You don’t typically choose individual contractors, but you can raise concerns if you have specific requirements.
- Installation works. Works are phased logically — insulation before heating upgrades, for example. Total installation time varies significantly: loft insulation might take half a day, while external solid wall insulation on a detached house could take three to four weeks. You should receive a clear programme of works in advance.
- Post-installation checks. The Retrofit Coordinator conducts a completion review. Contractors provide guarantees: cavity wall insulation typically carries a 25-year guarantee, heat pumps a 5–10 year manufacturer warranty, and solar PV panels a 25-year performance guarantee.
- Updated EPC. A new EPC is produced post-installation, documenting the improvement in your home’s rating. Keep this — it has value for future property transactions and further funding applications.
Grants and Funding Available Alongside the Home Upgrade Grant in 2026
HUG does not exist in isolation. Several other schemes can complement or supplement what HUG provides, and understanding the full funding landscape means you can potentially access more support.
The Boiler Upgrade Scheme (BUS) offers grants of £7,500 for air source heat pumps and £7,500 for ground source heat pumps, available to any homeowner in England and Wales regardless of income. If HUG covers your insulation but not your full heat pump cost, BUS can sometimes bridge the gap — though you cannot claim BUS on the same installation funded by HUG. Your Retrofit Coordinator should advise on which route is most advantageous. [INTERNAL: Boiler Upgrade Scheme Guide — for homeowners who don’t qualify for HUG but want to fund a heat pump independently]
The Warm Home Discount provides £150 off electricity bills for eligible low-income households and can be applied for annually alongside any physical improvement works funded by HUG. This is a separate payment, not an installation scheme, but it reduces bills while retrofit works are being planned or carried out.
Some local authorities supplement HUG with their own funding — particularly for properties in rural areas where costs are higher, or where listed building constraints make standard measures impractical. Always ask your council whether any top-up or complementary funding is available.
Energy suppliers also have obligations under the Energy Company Obligation (ECO4) scheme, which runs alongside HUG and covers gas-connected homes. If your property is unexpectedly found to be connected to a gas spur, you may be redirected to ECO4, which has its own qualifying criteria and measure set. [INTERNAL: ECO4 Scheme Guide — detailed eligibility and measure information for gas-connected homes in England]
For straightforward insulation measures — particularly loft and cavity wall — the Great British Insulation Scheme offers a simpler route to funding that doesn’t require the full PAS 2035 retrofit process. If your home only needs basic insulation top-ups rather than a comprehensive package, this may be faster and less disruptive than the full HUG process.
Common Problems, Limitations, and How to Address Them
The Home Upgrade Grant is a genuinely valuable scheme, but it has real limitations and practical challenges that are worth knowing before you begin.
Access and Waiting Times
Demand for HUG significantly exceeds capacity in many areas. Some local authority schemes have waiting lists of six to eighteen months. Contacting your council early — ideally as soon as you believe you may be eligible — is essential. Joining multiple referral pathways simultaneously (applying directly and asking a GP or housing officer to refer you) can improve your chances of being prioritised.
Postcode Availability
Not every local authority in England participates in HUG2, and funding allocations vary widely. Some councils exhausted their HUG2 allocation by early 2025. Check directly with your council whether funding remains available, and ask whether a HUG3 or successor scheme is expected. The government has signalled continued commitment to whole-house retrofit funding beyond the current phase.
Works Disruption
Comprehensive retrofit is not a minor inconvenience. External wall insulation involves scaffolding, noise, and significant exterior works lasting weeks. Internal wall insulation reduces room dimensions and requires all skirting boards, radiators, and sometimes kitchen units to be temporarily removed. Plan practically: arrange temporary accommodation if needed, secure pets, and clear rooms of furniture and valuables before contractor arrival dates.
Cavity Wall Insulation Failures
If your home previously had cavity wall insulation installed and has since suffered moisture penetration or blown fill, you may need remediation before new insulation can proceed. A borescope survey will identify this. Where failed insulation is present, extraction and reinstatement may be required, adding cost and time to the programme.
Maintenance Requirements After Installation
Funded measures require ongoing maintenance to perform as intended and to protect guarantees:
- Heat pumps require annual servicing (typically £100–£200 per year) and periodic refrigerant checks
- Solar PV panels should be cleaned every one to two years and inverters checked annually; inverters typically need replacement after 10–15 years at a cost of £500–£1,000
- MVHR systems require filter changes every three to six months and professional servicing annually
- External wall insulation render should be inspected every five years for cracks, as moisture ingress behind the insulation layer can cause serious structural problems if left unaddressed
- After insulation improvements, monitor indoor humidity carefully — well-sealed homes require adequate ventilation to prevent condensation and mould in areas like bathrooms and kitchens
Making the Most of Your Home Upgrade Grant Application
Taking a proactive approach to the application process significantly improves both the likelihood of approval and the quality of the package you receive.
Before your retrofit assessment, gather evidence of your home’s current condition: photographs of cold spots, condensation, or mould; recent energy bills showing annual consumption; and any existing documentation about your property’s construction type or age. This helps the assessor understand your home’s problems in context and supports recommendations for more comprehensive measures.
During the assessment, ask specifically about all eligible measures — assessors working under time pressure may not always volunteer every option. Ask whether solar PV, battery storage, or underfloor heating would be suitable for your property, even if you’re uncertain. The worst outcome is a polite explanation of why a measure isn’t technically suitable.
If you’re a private tenant, your landlord’s cooperation is legally required, and some landlords are reluctant to engage. In England, landlords of properties with EPC ratings of F or G are already legally required to improve those ratings under Minimum Energy Efficiency Standards (MEES) regulations. This obligation strengthens your position significantly — funded improvement works that bring a property into compliance with MEES regulations are something landlords are increasingly motivated to accept.
Finally, keep all documentation you receive — the Medium-Term Improvement Plan, installation certificates, guarantees, and your updated EPC. This paperwork has value for insurance purposes, future resale, and any subsequent applications for further improvement funding as successor schemes emerge. The Home Upgrade Grant represents one step in a longer journey towards a fully decarbonised home, and the documentation trail you build now supports every future step. [INTERNAL: Government Energy Grants — overview of the full range of UK energy grant schemes available to homeowners in 2026]
