A heat pump works by extracting heat from the outside air, ground, or water and transferring it indoors, using electricity to power the process rather than burning fuel. The UK government states that a typical air source heat pump can deliver 3–4 kWh of heat for every 1 kWh of electricity consumed (GOV.UK, 2026). This efficiency makes them a low-carbon heating option.
- Heat pumps extract heat from air, ground, or water outdoors.
- A typical air source pump delivers 3–4 kWh per 1 kWh electricity.
- The refrigeration cycle reverses a fridge to heat your home.
The key variable is the heat pump’s Coefficient of Performance (COP), which measures how much heat is produced per unit of electricity. A COP of 3.5 means 350% efficiency, compared to a gas boiler’s 85–90%. However, performance drops in very cold weather, and older homes with poor insulation may see lower real-world efficiency. Heat pumps work best with underfloor heating or large radiators, as they heat water to a lower temperature than gas boilers.
How the refrigeration cycle transfers heat
Inside a heat pump, a refrigerant circulates between an outdoor coil and an indoor coil. In heating mode, the refrigerant absorbs heat from the outside air (even at -15°C) and evaporates into a gas. A compressor then pressurises the gas, raising its temperature to around 60–80°C. The hot gas passes through an indoor heat exchanger, releasing heat into your home’s heating system. The refrigerant then condenses back into a liquid and the cycle repeats. The Energy Saving Trust explains that this process is essentially a refrigerator running in reverse (Energy Saving Trust, 2026).
Air source versus ground source heat pumps
Air source heat pumps (ASHPs) are the most common in UK homes, costing between £7,000 and £13,000 installed, according to the Energy Saving Trust. They draw heat from the outdoor air, even in winter. Ground source heat pumps (GSHPs) use buried pipes filled with water and antifreeze to extract heat from the ground, which stays at a stable 10–12°C year-round. GSHPs are typically more efficient, with COPs of 3.5–4.5, but installation costs range from £14,000 to £24,000 (MCS Certified, 2026). Both types qualify for the Boiler Upgrade Scheme grant of £7,500.
Why efficiency depends on your home and installation
For a heat pump to work efficiently, your home must be well-insulated and airtight. The Energy Saving Trust recommends a minimum loft insulation of 270mm and cavity wall insulation before installing a heat pump. The heat pump’s lower flow temperature (typically 35–45°C) means it takes longer to heat rooms than a gas boiler set at 60°C. If your radiators are undersized, you may need larger ones or underfloor heating. A poor installation can slash efficiency by 20% or more. TrustMark-registered installers ensure the system is correctly sized and commissioned (TrustMark, 2026).
A worked example
A typical 1930s semi-detached home in Manchester switching from a gas boiler to an air source heat pump would cost roughly £12,000 after the BUS grant of £7,500 is deducted from the typical £19,500 installed price. The Energy Saving Trust estimates annual heating savings of around £490 compared to a gas boiler at 2025 fuel prices, assuming the home has basic loft and cavity wall insulation. Payback on the net cost lands at roughly 24 years based on current energy price caps. Over a 25-year heat pump lifespan, total savings reach approximately £12,250 before accounting for the 0% VAT rate on installations until March 2027. Real-world performance depends on the property having a heat-loss calculation under 50 W/m² and radiators sized for a 45°C flow temperature. The Energy Saving Trust recommends getting at least three quotes from MCS-certified installers to compare costs and grant eligibility.
| Item | Figure |
|---|---|
| Upfront cost after grants | £12,000 |
| Yearly savings | £490 |
| Payback period | 24 years |
| 25-year lifetime savings | £12,250 |
What homeowners often get wrong
The most common mistake is believing heat pumps cannot work in older UK homes with single glazing or solid walls. This misconception leads many homeowners to rule out a heat pump without checking the actual heat loss of their property. Here are the three biggest errors people make.
- Assuming heat pumps need underfloor heating exclusively Many people think heat pumps only work with underfloor systems, but they work perfectly well with oversized radiators designed for a 45°C flow temperature. Using standard radiators from a gas boiler setup without upsizing them can leave rooms cold and increase running costs by up to 20%.
- Believing you must have a hot water tank Some homeowners reject heat pumps because they want to keep a combi boiler, but a heat pump requires a hot water cylinder to store water at 50°C. Installing a heat pump without a tank means you cannot use the system for hot water, wasting the £7,500 BUS grant on a partial solution.
- Ignoring insulation before installation A common error is installing a heat pump in a draughty home without first improving loft insulation to 270 mm or filling cavity walls. Poor insulation forces the heat pump to run at higher flow temperatures, dropping its COP below 2.5 and wiping out the £490 yearly savings you expected.
Quick reference
- A typical air source heat pump costs £7,000 to £13,000 after the BUS grant, depending on property size and installer rates.
- Heat pumps achieve a Coefficient of Performance of 3.0 to 4.0 in well-insulated UK homes, meaning 300–400% efficiency.
- You qualify for the £7,500 BUS grant if you own your home and have a valid EPC with no outstanding loft or cavity wall insulation recommendations.
- Annual running costs for a heat pump in a 3-bed semi-detached home are roughly £850, compared to £1,340 for a gas boiler at current price caps.
- Installing a heat pump in a home with single glazing or uninsulated solid walls can reduce real-world COP below 2.0. That makes it more expensive to run than a gas boiler.
Frequently Asked Questions
Yes, heat pumps work even in winter by absorbing heat from outside air as cold as -15°C. The Energy Saving Trust confirms this process remains effective down to very low temperatures.
A typical COP is 3.5, meaning 350% efficiency compared to a gas boiler's 85–90%. The UK government states performance drops in very cold weather and older homes with poor insulation.
Yes, heat pumps are more efficient and lower-carbon, delivering 3–4 kWh of heat per 1 kWh of electricity. Ofgem recommends them as a key low-carbon heating option for the UK.
