A heat pump replacement costs roughly 60% more than a new gas boiler upfront, but running-cost savings and government grants can close the gap within five years.
If you are weighing up a new heating system, the headline cost difference is stark. A full air-source heat pump replacement in 2026 costs between £12,000 and £14,000 installed, according to the Energy Saving Trust (Energy Saving Trust, 2026). That compares with £2,500 to £4,000 for a new gas boiler. However, the £7,500 Boiler Upgrade Scheme grant for England and Wales cuts the heat pump net cost to £4,500–£6,500, narrowing the upfront gap to roughly £1,500–£3,000. Annual running costs for a heat pump are typically £200–£400 lower than for a new gas boiler under the 2026 Ofgem price cap (Ofgem, 2026), meaning the extra upfront spend can be recovered within four to seven years.
Who qualifies for the £7,500 Boiler Upgrade Scheme grant in 2026
The Boiler Upgrade Scheme is administered by Ofgem on behalf of the Department for Energy Security and Net Zero (DESNZ). To qualify, your property must be in England or Wales and you must own it (tenants cannot apply directly). You need a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation (GOV.UK, 2026).
The grant applies only to air-source or ground-source heat pumps installed by an MCS-certified installer. The system must replace an existing fossil-fuel heating system, gas, oil, LPG, or direct electric. New-build homes occupied for the first time after the grant application date are ineligible. The £7,500 is deducted from the installer’s invoice, so you pay the reduced price directly.
Quick numbers heat pump replacement cost breakdown for 2026
| Cost item | Amount (£) | Source |
|---|---|---|
| Upfront cost (air-source, installed) | £12,000–£14,000 | Energy Saving Trust, 2026 |
| Boiler Upgrade Scheme grant | £7,500 | GOV.UK, 2026 |
| Net cost after grant | £4,500–£6,500 | Energy Saving Trust, 2026 |
| Average annual running cost (heat pump, 3.5 SCOP) | £850–£1,100 | Energy Saving Trust, 2026 |
| Average annual running cost (new gas boiler, 90% efficient) | £1,100–£1,400 | Ofgem, 2026 |
| Typical annual savings vs new gas boiler | £200–£400 | Energy Saving Trust, 2026 |
| Payback period (after grant, vs new boiler) | 4–7 years | Energy Saving Trust, 2026 |
Heat pump replacement cost is determined by property size
The base cost range of £12,000–£14,000 assumes an average 3-bed semi-detached home with reasonable insulation. Three key factors push costs higher or lower. First, larger homes need higher-output heat pumps: an 8–12 kW unit adds £2,000–£4,000 compared with a 5–7 kW unit (MCS installer data, 2026). Second, poor insulation, single glazing or uninsulated cavity walls, forces a larger unit or additional retrofit work, raising total cost by £1,000–£3,000. Third, system type matters: ground-source heat pumps cost £18,000–£25,000 before grant but achieve a higher Seasonal Coefficient of Performance (SCOP) of 4.0 or above, meaning lower running costs. The SCOP is a measure of how many units of heat a pump produces for each unit of electricity it consumes; a higher SCOP means greater efficiency. Air-source remains the most common replacement choice; ground-source is viable only if you have enough garden space for ground loops.
For a detailed look at how insulation upgrades affect your overall budget, see how to improve home insulation before installing a heat pump.
The direct answer to “heat pump replacement cost UK” for a typical 3-bed semi-detached home in 2026
After the £7,500 Boiler Upgrade Scheme grant, the net cost of a fully installed air-source heat pump replacement is £4,500–£6,500, compared with £2,500–£4,000 for a new gas boiler. Annual running costs for the heat pump are £200–£400 lower than for a new gas boiler, based on 2026 energy prices. Payback on the extra upfront cost (after grant) is achieved in 4–7 years through lower energy bills. Total cost of ownership over 15 years, including installation, running, and maintenance, is roughly equal to or slightly lower than a new gas boiler, according to Energy Saving Trust modelling (Energy Saving Trust, 2026).
How to verify your installer is MCS-certified and eligible for the grant
To claim the Boiler Upgrade Scheme grant, your installer must hold Microgeneration Certification Scheme (MCS) accreditation. Check the MCS online directory at mcs-certified.com (MCS, 2026). The installer must also be registered with TrustMark, which provides consumer protection and is a requirement for grant claims. Ask for a written quote that includes the grant deduction, the installer handles the grant application on your behalf. Confirm that the specific heat pump model is listed on the MCS product database; not all models qualify. For a gas boiler replacement, the installer must be Gas Safe registered (Gas Safe Register, 2026), but for heat pumps, MCS certification alone is sufficient.
What happens if you don’t qualify for the Boiler Upgrade Scheme
If you live in Scotland, you can apply for the Home Energy Scotland loan of up to £7,500 interest-free, which covers heat pumps. However, as of 2026, there is no grant in Scotland, only a loan (Energy Saving Trust, 2026). Northern Ireland had the Renewable Heat Incentive (RHI) but it is closed to new applicants; the Boiler Upgrade Scheme does not apply there. If your EPC shows required insulation improvements, you must complete them before applying, which typically costs £500–£2,000 for cavity wall or loft insulation. Tenants cannot claim the grant themselves, the landlord must apply. Without any grant, the full cost of £12,000–£14,000 applies, making payback longer (8–12 years) unless your existing heating costs are very high, for example if you use electric storage heaters.
For more on alternative funding routes, see government grants for home heating upgrades 2026.
Frequently Asked Questions
A full air-source heat pump replacement costs £12,000–£14,000 installed, according to the Energy Saving Trust (2026). After the £7,500 Boiler Upgrade Scheme grant, the net cost is £4,500–£6,500.
Yes, a heat pump typically saves £200–£400 per year on running costs compared with a new gas boiler under the 2026 Ofgem price cap (Ofgem, 2026). The exact saving depends on your home's insulation and heating patterns.
You qualify if you own a property in England or Wales and replace an existing fossil-fuel heating system (gas, oil, LPG, or direct electric) with an MCS-certified heat pump. You must also have a valid EPC with no outstanding loft or cavity wall insulation recommendations (GOV.UK, 2026).
The extra upfront cost compared with a gas boiler is typically recovered within 4 to 7 years through lower annual running costs and the £7,500 grant (Energy Saving Trust, 2026). Actual payback depends on energy prices and usage.
The Boiler Upgrade Scheme only covers England and Wales. In Scotland, you may be eligible for the Warmer Homes Scotland programme or the Home Energy Scotland loan with cashback, which offers up to £7,500 for heat pumps (Home Energy Scotland, 2026).
