The Boiler Upgrade Scheme pays £7,500 towards a heat pump, here is what the average homeowner actually pays
If you are thinking about swapping your gas or oil boiler for a heat pump, the government’s Boiler Upgrade Scheme is the main financial incentive available. The grant was raised from £5,000 to £7,500 in October 2023 and remains at that level in 2026 (GOV.UK, 2026).
The Boiler Upgrade Scheme pays £7,500 towards a heat pump, cutting your out-of-pocket cost to £4,500–£7,500. For most gas-heated homes, the payback is 8–12 years. That makes it worth it if you plan to stay long-term.
- Grant is £7,500 for air-source heat pumps in 2026
- Typical out-of-pocket cost after grant: £4,500–£7,500
- Annual running cost saving vs gas boiler: £200–£400
- Payback period ranges from 8 to 12 years
- Best value for off-gas-grid homes with oil or LPG
- The Boiler Upgrade Scheme pays £7,500 towards a heat pump, here is what the average homeowner actually pays
- Quick numbers grant amount, typical cost, running cost, and payback period
- Is the Boiler Upgrade Scheme worth it for most homeowners in 2026?
- Who is eligible for the Boiler Upgrade Scheme in 2026?
- How the running costs of a heat pump compare to a gas boiler after the grant
- How to verify an MCS-certified installer and avoid losing the grant
- What the Boiler Upgrade Scheme does not cover, and the costs that surprise homeowners
- How the Boiler Upgrade Scheme compares to other government heating grants in 2026
The average installed cost of an air-source heat pump in a UK home in 2025-26 is approximately £12,000 to £15,000, meaning the grant typically covers 50% to 60% of the total (Energy Saving Trust, 2026). After the grant, homeowners should expect to pay between £4,500 and £7,500 out of pocket, depending on property size and system complexity.
Quick numbers grant amount, typical cost, running cost, and payback period
| Metric | Value | Source |
|---|---|---|
| Grant amount | £7,500 | DESNZ, 2026 |
| Typical installed cost | £12,000–£15,000 | Energy Saving Trust, 2026 |
| Average out-of-pocket cost | £4,500–£7,500 | Calculated from above |
| Annual running cost saving vs gas boiler | £200–£400 | Ofgem, 2026 |
| Typical payback period | 8–12 years | Energy Saving Trust, 2026 |
Is the Boiler Upgrade Scheme worth it for most homeowners in 2026?
For a typical gas-heated semi-detached home with good insulation, the scheme is worth it because the grant reduces the upfront cost to a level where the 8 to 12 year payback becomes realistic (DESNZ impact assessment, 2023). For homes with poor insulation or off-gas-grid oil or LPG heating, the scheme is more clearly worth it because running cost savings are higher and the payback period shorter (Energy Saving Trust, 2026). For homes on mains gas with low heating bills, such as well-insulated flats, the scheme may not be worth it because the payback period exceeds 15 years.
Who is eligible for the Boiler Upgrade Scheme in 2026?
You must be an owner-occupier in England or Wales. Scotland and Northern Ireland have separate schemes. The property must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation (GOV.UK, 2026). The existing heating system must be a fossil fuel boiler (gas, oil, LPG, or direct electric). The scheme is not available for homes already using a heat pump. The heat pump must be installed by an MCS-certified installer.
How the running costs of a heat pump compare to a gas boiler after the grant
Annual running cost for a heat pump in a typical three-bedroom home is £600 to £800, based on the 2025-26 gas and electricity price cap. Annual running cost for a gas boiler in the same home is £800 to £1,100 (Ofgem, 2026). The gap has narrowed since April 2026 because the electricity-to-gas price ratio improved under the latest price cap (Energy Saving Trust, 2026). Running costs are lower if the home has a high heat loss, because heat pumps operate more efficiently at low flow temperatures.
How to verify an MCS-certified installer and avoid losing the grant
The installer must be registered with the Microgeneration Certification Scheme (MCS). Check the MCS Installer Directory at mcsdirectory.com (MCS, 2026). The installer must also be registered with TrustMark for consumer protection. The grant application is submitted by the installer, not the homeowner, so you must confirm the installer is on the MCS register before signing a contract. After installation, you will receive an MCS certificate and must keep it for any future property sale or grant compliance check. how to check an installer is certified
What the Boiler Upgrade Scheme does not cover, and the costs that surprise homeowners
The grant does not cover any preparatory work: new pipework, larger radiators, or a hot water cylinder if the existing property lacks one. These preparatory costs typically add £1,000 to £3,000 to the total (DESNZ, 2026). The grant also does not cover the cost of removing the old boiler (Energy Saving Trust, 2026). Homeowners should budget for a full system survey before applying to avoid unexpected costs.
How the Boiler Upgrade Scheme compares to other government heating grants in 2026
The Great British Insulation Scheme closed on 31 March 2026. It funded insulation measures only and never covered windows or glazing. The Home Upgrade Grant (HUG) covers heat pumps for low-income households off the gas grid, with up to £15,000 available, but it is means-tested (DESNZ, 2026). The ECO4 scheme offers free heat pumps for eligible low-income households, but eligibility is stricter than the BUS. The BUS is the only universal, non-means-tested grant for heat pumps in England and Wales. grants for off-grid homes
Frequently Asked Questions
The grant is £7,500 for an air-source heat pump, raised from £5,000 in October 2023 and unchanged in 2026 (GOV.UK, 2026).
Owner-occupiers in England or Wales with a valid Energy Performance Certificate (EPC) and no outstanding recommendations are eligible (Ofgem, 2026).
Typical payback is 8 to 12 years for a gas-heated semi-detached home with good insulation (Energy Saving Trust, 2026).
For a well-insulated flat on mains gas, the payback may exceed 15 years, making the scheme less worthwhile (Energy Saving Trust, 2026).
Yes, the £7,500 grant is deducted from the total installed cost, typically £12,000 to £15,000, leaving you to pay £4,500 to £7,500 (DESNZ, 2026).
