Heat pump running costs are lower than a gas boiler under the current price cap, but only with a well-insulated home
Comparing the running cost of a heat pump against a gas boiler in 2026 depends on a single variable more than any other: your home’s insulation. Under the January 2026 price cap, electricity costs 24.86p per kWh and gas costs 6.34p per kWh, making electricity nearly four times more expensive per unit of energy (Ofgem, 2026). However, a heat pump converts each unit of electricity into far more heat than a gas boiler can extract from a unit of gas, which is where the comparison gets interesting.
At the current price cap, a heat pump with a Seasonal Coefficient of Performance (SCOP) of 3.5 delivers 1 kWh of heat for roughly 7.1p, while a gas boiler at 90% efficiency delivers the same heat for about 7.0p, the two are virtually identical. If your home has poor insulation (EPC band D or below), a heat pump’s SCOP can fall to 2.5, pushing the cost per kWh of heat to roughly 9.9p, which is 40% more expensive than gas. Every 0.5 increase in SCOP cuts running costs by roughly 14% (Energy Saving Trust, 2026).
How the running cost comparison changes with your home’s insulation and heating system
The SCOP is the single biggest factor determining a heat pump’s running cost. It depends on radiator size, pipework, and insulation, all of which must meet MCS installer standards (MCS, 2026). For a typical 3-bed semi-detached home using 12,000 kWh of heat per year (based on ONS housing stock data), the annual running costs break down as follows:
- Gas boiler at 90% efficiency: 12,000 ÷ 0.90 × 6.34p = £845/year.
- Heat pump at SCOP 3.5 (good insulation): 12,000 ÷ 3.5 × 24.86p = £852/year, near-identical to gas.
- Heat pump at SCOP 4.0 (excellent insulation): 12,000 ÷ 4.0 × 24.86p = £746/year, 12% cheaper than gas.
- Heat pump at SCOP 2.5 (poor insulation): 12,000 ÷ 2.5 × 24.86p = £1,193/year, 41% more expensive than gas.
The heat pump operates at a lower flow temperature (typically 35–45°C compared to 60–70°C for gas). This means it runs for longer periods but more efficiently, which is normal and does not increase overall cost (Energy Saving Trust, 2026). How to improve your home's insulation before installing a heat pump
The upfront cost gap heat pump installation vs gas boiler replacement in 2026
The upfront cost difference is substantial. A new gas boiler installation (combi, like-for-like) costs £1,800 to £3,000 in 2026. An air-source heat pump installation, including radiator or underfloor heating upgrades, costs £7,500 to £13,000 (Energy Saving Trust, 2026).
The Boiler Upgrade Scheme (BUS) provides a grant of £7,500 towards a heat pump installation in England and Wales (GOV.UK, 2026). After the grant, a typical installation nets £2,500 to £5,500, still higher than a gas boiler, but closer. The payback period on the additional upfront cost, assuming SCOP 3.5 and no fuel price changes, is roughly 15 to 20 years. With a higher SCOP or rising gas prices, the payback period shortens.
Quick numbers annual running cost for a typical UK home
| Heat source | Efficiency / SCOP | Annual cost (12,000 kWh heat) | Source |
|---|---|---|---|
| Gas boiler (new condensing) | 90% | £845 | Ofgem price cap, Jan–Mar 2026 |
| Heat pump (good insulation) | SCOP 3.5 | £852 | Ofgem + EST SCOP data |
| Heat pump (excellent insulation) | SCOP 4.0 | £746 | Ofgem + EST SCOP data |
| Heat pump (poor insulation) | SCOP 2.5 | £1,193 | Ofgem + EST SCOP data |
| Gas boiler (older, 75% efficient) | 75% | £1,014 | Ofgem + EST boiler efficiency data |
What a heat pump actually costs to run per month compared to gas
For a home using 1,000 kWh of heat per month in winter, the monthly costs are:
- Gas boiler: 1,000 ÷ 0.90 × 6.34p = £70.44/month.
- Heat pump (SCOP 3.5): 1,000 ÷ 3.5 × 24.86p = £71.03/month, essentially the same.
The heat pump’s monthly cost is not significantly higher than gas when the home is well-insulated and the system is correctly sized to MCS standards (MCS, 2026). If the heat pump uses a time-of-use tariff (e.g., Economy 7 or a smart tariff with cheaper overnight rates), the monthly cost can drop by 15 to 30% (Ofgem, 2026). The biggest risk is undersizing the heat pump or poor insulation, which forces the backup electric heater to run, this can double the monthly cost (Energy Saving Trust, 2026). Best time-of-use tariffs for heat pump owners
Eligibility, certification, and how to verify your heat pump installer in 2026
To qualify for the £7,500 BUS grant, the heat pump and installer must be MCS-certified, and the property must have an EPC with no outstanding recommendations for loft or cavity wall insulation (GOV.UK, 2026). For a gas boiler installation, the installer must be Gas Safe registered (Gas Safe Register, 2026).
Check an installer’s MCS certification on the MCS website (mcs-certified.com) or ask for their MCS certificate number. TrustMark is a government-endorsed quality scheme covering both heat pump and boiler installers, look for the TrustMark logo when choosing a contractor (TrustMark, 2026). For electrical work such as heat pump wiring, the installer should be registered with NICEIC or NAPIT under the Part P competent person scheme.
Frequently Asked Questions
Yes, but only with good insulation. At SCOP 3.5, running costs are near-identical at £852/year for a heat pump versus £845/year for gas. With excellent insulation (SCOP 4.0), a heat pump is 12% cheaper at £746/year (Energy Saving Trust, 2026).
A heat pump needs a SCOP of at least 3.5 to match gas boiler running costs at 2026 price cap rates. At SCOP 4.0, it becomes 12% cheaper (Ofgem, 2026).
For a 3-bed semi using 12,000 kWh of heat annually, a heat pump at SCOP 3.5 costs £852/year, the same as a gas boiler at £845/year. At SCOP 4.0, it drops to £746/year (Energy Saving Trust, 2026).
Yes, poor insulation (EPC band D or below) can lower SCOP to 2.5, making a heat pump 41% more expensive than gas at £1,193/year versus £845/year (Ofgem, 2026).
SCOP measures heat pump efficiency, typically 3.0 to 4.0 for well-installed systems. Each 0.5 increase cuts running costs by 14% (MCS, 2026).
