Heat Pumps
Complete UK guide to heat pumps. Compare costs, grants, running costs and the best electricity tariffs for heat pump households.
Heat pumps are the UK government’s primary technology for decarbonising home heating. More efficient than gas boilers, capable of providing both heat and hot water, and increasingly affordable following the Boiler Upgrade Scheme grant. They’re a serious option for many UK homes in 2026.
Ofgem’s Q2 2025 price cap stands at £1,849 a year. Standing charges alone add up to around £338 across both fuels before you use a single unit.
But heat pumps aren’t right for every property, and the upfront cost is real. This guide covers everything you need to know, from how they work to what they cost, which grants are available, and how to choose the right electricity tariff to run one cheaply.
What Is a Heat Pump?
A heat pump moves heat from one place to another rather than generating it by burning fuel. An air source heat pump (ASHP) extracts latent heat from outdoor air and concentrates it to warm your home. For every 1 kWh of electricity it consumes, a modern heat pump typically produces 2.5–4 kWh of heat, a Coefficient of Performance (COP) of 2.5–4. Compare that to a gas boiler at roughly 90% efficiency (0.9 kWh of heat per kWh of gas).
Types of Heat Pump Available in the UK
| Type | How It Works | Typical Cost Installed | Best For |
|---|---|---|---|
| Air Source (ASHP) | Extracts heat from outdoor air | £7,000–£13,000 | Most homes with outdoor space |
| Ground Source (GSHP) | Extracts heat from ground via buried loops | £15,000–£35,000 | Properties with land for ground loops |
| Air to Water | Heats water for radiators and DHW | Included above | Central heating and hot water |
| Air to Air | Heats/cools air directly | £2,000–£5,000 | Supplementary heating/cooling only |
The Boiler Upgrade Scheme, £7,500 Grant
The UK government’s Boiler Upgrade Scheme (BUS) provides a £7,500 grant for air source and ground source heat pumps. The grant is applied directly by your installer. You don’t claim it separately. Eligibility requires a valid EPC with no outstanding insulation recommendations. The scheme runs until 2028. At current grant levels, a well insulated home can get an ASHP installed for £0–£5,500 net.
Is Your Home Heat Pump Ready?
- Well insulated? Heat pumps work best in homes that retain heat (EPC C or above is ideal).
- Larger radiators or underfloor heating? Heat pumps run at lower flow temperatures, bigger heat emitters work better.
- Space for an outdoor unit? An ASHP unit’s roughly the size of an air conditioning condenser.
- Off gas grid? Heat pumps are an excellent alternative to oil or LPG boilers.
- New build? Heat pumps are now required.
Heat Pump Running Costs and the Right Electricity Tariff
Running costs depend heavily on your electricity tariff. Heat pumps run on electricity so the cheapest electricity rate significantly reduces running costs. Specialist heat pump tariffs, such as Octopus Cosy, Intelligent Octopus Go, and E.ON Drive Anytime, offer cheaper off peak rates that can cut heat pump running costs by 20–40%. See our Compare Electricity page for electricity tariff comparisons, and our EV Chargers guide for overnight tariff options that also benefit heat pump households.
Heat pumps work best in well insulated homes. If you’re already spending on loft or wall insulation, the timing to add a heat pump can work out well financially.
- Ask about whether you qualify for the Boiler Upgrade Scheme £7,500 grant before committing to a price
- Get at least two MCS certified quotes and ask each installer to provide a full heat loss calculation for your property
- Underfloor heating is particularly well suited to heat pumps due to its large surface area and low flow temperature
- Check whether your current radiators are large enough to work efficiently at lower flow temperatures: heat pumps typically run at 45-55°C rather than the 70-80°C of a conventional boiler
- Heat pumps work best in well insulated homes: if your EPC rating is D or below, improving insulation first often makes more financial sense
Is Your Home Ready for a Heat Pump?
The Boiler Upgrade Scheme (BUS) offers a £7,500 grant toward the installed cost of an air source heat pump, or £7,500 for a ground source heat pump. This grant is available to homeowners in England and Wales replacing a fossil fuel heating system. The scheme runs through MCS certified installers, and the grant is applied as a reduction to the installer’s quote rather than paid directly to the homeowner. The average installed cost of an ASHP in 2025 is around £8,000-14,000 before the grant, making the total out of pocket cost for many homeowners £500-6,500 depending on the system size and property requirements. Scotland has its own Heat Pump Fund with different eligibility rules. Heat Trust accreditation is a useful quality mark for installers, look for it when getting quotes.
Government Support for Heat Pump Installation
A heat pump moves heat rather than generating it, which is why it can produce three to four units of heat energy for every unit of electricity consumed, a ratio known as the coefficient of performance (COP). In mild UK conditions, an air source heat pump (ASHP) running at COP 3 will produce £1 worth of heat for every 33p of electricity. A gas boiler, by contrast, converts fuel to heat at around 85-92% efficiency, meaning you pay for most of what you get but never get more than you pay for. The economics of heat pumps therefore depend heavily on the ratio of electricity to gas prices. At current UK rates, gas around 6.4p/kWh versus electricity at 24p/kWh, a heat pump with COP 3.5 is roughly cost neutral against a well maintained condensing gas boiler. As electricity prices fall relative to gas over the coming decade, the balance shifts further in the heat pump’s favour.
The Boiler Upgrade Scheme: What You Get
The Boiler Upgrade Scheme, launched in 2022 and running through 2025 (with intentions to extend), provides a £7,500 grant for air source heat pump installation or £7,500 for ground source heat pump installation. This brings the net cost of an ASHP to around £1,500–£4,500, making them financially accessible. Eligibility requires owning the property, having an EPC rating of D or better (or committing to improvements), and using an MCS certified installer. The scheme is available in England and Wales; Scotland and Northern Ireland have separate schemes. You apply through an approved installer, who deducts the grant from your invoice. This significantly changes the ROI calculation: £10,000 less grants and you save £800–£1,200/year on heating costs, achieving payback in under 10 years. The scheme is genuinely transformational for heat pump adoption. However, funding is capped; if you’re interested, act sooner rather than later as schemes can close early. Check the official Boiler Upgrade Scheme website or contact installers to confirm current eligibility and available funding. Combined with rising gas prices and improving efficiency, heat pumps are increasingly the most affordable long term heating option.
Frequently Asked Questions
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Do heat pumps work in cold UK winters?
Yes. Modern air source heat pumps are designed to operate down to -20°C. Performance (COP) decreases slightly in very cold weather.
But the heat pump continues to warm your home effectively. Ground source heat pumps are less affected by air temperature as ground temperatures remain more stable.
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Can a heat pump replace my gas boiler completely?
In a wel insulated home with adequate heat emitters, yes, a properly sized heat pump can provide all space heating and domestic hot water. In older, poorly insulated homes, a heat pump may struggle to replace a high temperature gas boiler without insulation or radiator upgrades first.
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How long does a heat pump last?
A well maintained air source heat pump typically lasts 15–20+ years, longer than most gas boilers. Ground source systems can last 20–25 years. Annual maintenance servicing (similar in cost to boiler service, around £100–£150) keeps performance optimal.
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Is a heat pump cheaper to run than a gas boiler?
At current energy prices, heat pumps are broadly cost neutral or marginally cheaper than gas boilers for well insulated homes on a specialist heat pump tariff. For poorly insulated homes, running costs may be higher. The 4x efficiency advantage of heat pumps is increasingly compelling as electricity tariffs for heat pump users improve.
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What grants are available for heat pumps in 2026?
The Boiler Upgrade Scheme offers £7,500 for ASHPs and GSHPs. Also, some local authorities and energy networks offer supplementary support. The grant is applied by your MCS certified installer, find one at mcscertified.com. For homes in fuel poverty, the ECO4 scheme may also cover heat pump installation costs.
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Do I need planning permission for an air source heat pump?
In most cases in England, Wales, and Scotland, ASHPs fall under permitted development rights, no planning permission required if noise and siting criteria are met. Listed buildings and some conservation areas may require permission. Check with your local planning authority if in doubt.
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What's the best electricity tariff for a heat pump?
Specialist time of use tariffs designed for heat pump households, particularly Octopus Cosy, which offers three cheap periods per day, deliver the best running cost savings. Compare all heat pump compatible electricity tariffs on our Compare Electricity page.
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How much does it cost to run a heat pump?
Running costs depend heavily on your home’s insulation, the heat pump’s efficiency (COP), and your electricity tariff. For a well insulated three bedroom home, annual running costs are typically £800-1,400 on a standard tariff. On a smart overnight tariff running the heating during cheap rate hours and storing heat in a buffer tank, costs can be reduced further. The key comparison is against your current heating bill, for homes spending £1,200+ a year on gas, a well specified heat pump can be roughly cost neutral even at current electricity prices.
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Do I need planning permission to install a heat pump?
Most air source heat pumps fall under permitted development rights, meaning no planning permission is required in England for homes that meet certain size and siting conditions (the unit must be no larger than 0.6m² in any dimension and sited away from public roads). Listed buildings and properties in conservation areas may need consent. Ground source heat pumps require ground works that may need building regulation approval. Your MCS installer should advise you on planning requirements as part of the quotation process.
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Can a heat pump heat my home as effectively as a gas boiler?
Yes, if sized and installed correctly. The main practical difference is that heat pumps run more constantly at lower temperatures rather than cycling on and off at higher temperatures like a boiler. This can feel unfamiliar at first, the house warms gradually rather than quickly, but is equally effective at maintaining comfortable temperatures. Most heat pump owners report adequate warmth once the system is properly commissioned. The critical success factors are an accurate heat loss calculation, correctly sized radiators or underfloor heating, and good insulation.