Is a heat pump worth it? An honest UK cost guide

What a heat pump costs in 2026

A typical air-source heat pump installation costs around £11,000, according to the Energy Saving Trust. Real quotes usually land somewhere between roughly £10,000 and £14,000 — the spread comes down to the size of your home, whether it's a straightforward retrofit or needs new radiators and pipework, and how much of the work is bundled in.

That's the sticker price. In England and Wales, the Boiler Upgrade Scheme takes £7,500 off an air-source or ground-source heat pump — applied as an up-front discount by your installer, so a typical install comes down to from around £3,500 out of pocket. From 21 July 2026 until March 2027, homes heated by oil or LPG with no mains gas connection can get £9,000 instead, an extra £1,500. Scotland runs a separate scheme (a Home Energy Scotland grant of up to £7,500 plus an optional interest-free loan).

Update, 29 September 2026: applications to the Boiler Upgrade Scheme have reached their highest level since it opened in May 2022. Government figures published on 24 September show 8,150 applications in July 2026, the highest month so far, and 7,486 in August, the second highest and more than double the 3,401 in August 2025. The £9,000 grant for oil and LPG homes opened on 21 July, and 5,351 applications for it had come in by the end of August. That is 34% of the 15,636 applications received across July and August. The research and innovation foundation Nesta responded the same day under the headline "Surge in heat pump applications driven by oil price fears". It said rising oil and gas prices "from the war on Iran" were making switching more appealing, especially with the higher £9,000 grant on offer for a limited time. Heating oil has gone up. The ONS consumer prices index for liquid fuels, the category that includes domestic heating oil, was 64.6% higher in August 2026 than a year earlier. That gap peaked at 129.6% in April and was 42.8% in July. But the government figures count applications, not reasons. The bigger grant opened in the same month as the record, so the figures can't show how much of the rise comes from oil prices and how much from the extra £1,500. In April, Nesta estimated that a medium-sized oil-heated home could save over £650 a year by switching. That estimate used April's prices, and Nesta said then that oil prices were likely to ease and the saving may narrow. What you would save depends on your home, your tariff and what oil costs in future. Any savings figure is an estimate until an installer has done a heat-loss survey of your home. If you heat with oil now, our heating oil guide covers the government’s new heating oil policy and the help with oil costs in each nation.

So the grant does most of the heavy lifting on the upfront cost. The harder question — and the one the sales sites gloss over — is what it costs to run.

Will it actually save you money to run?

Here's the honest answer: not automatically. Under the Ofgem price cap for 1 October–31 December 2026, electricity costs about 26.32p per kWh while gas costs about 7.97p — so electricity is roughly three-and-a-third times the price of gas per unit. Ofgem notes there's no VAT on electricity from 1 October 2026 to 31 March 2027. A heat pump is far more efficient than a boiler, but it runs on that pricier electricity.

The upshot: on a standard electricity tariff, a heat pump can cost about the same as — or slightly more than — a new gas boiler to run. The Energy Saving Trust's own illustrative figures put a heat pump at roughly £992 a year against about £787 for a new gas boiler on standard-tariff prices. Anyone telling you a heat pump is a guaranteed money-saver, or that 'it pays for itself', is overselling it.

What changes the maths is the tariff. Research by Nesta (modelling by Cornwall Insight) found that simply moving to a flexible, time-of-use tariff saved heat-pump households up to £600 a year versus a standard tariff — even without actively shifting when the heat pump ran. Several suppliers now offer dedicated heat-pump tariffs with cheap overnight electricity. Get onto one of those and the running-cost picture shifts in your favour; stay on a standard tariff and it often won't.

Why the numbers depend on your home

A heat pump doesn't blast out heat like a gas boiler. It delivers water to your radiators at a lower 'flow temperature' — typically around 35–55°C, versus 65–75°C for a boiler — and warms the house gently and steadily. The lower the flow temperature it can run at while keeping you comfortable, the more efficient it is (measured as its seasonal performance, or SCOP).

That's why the same heat pump performs very differently in two different houses. A well-insulated home with big radiators or underfloor heating lets it run cool and efficient; a draughty home with small radiators forces it to run hotter and harder, which costs more. This is exactly what a proper heat-loss survey is for — it sizes the system to your actual house rather than a rule of thumb, and a good installer won't quote without one.

When a heat pump might not be right (yet)

A heat pump suits most UK homes — but not all of them, and not always today. It's worth being honest about the situations where it's a weaker fit:

Poorly insulated, hard-to-insulate homes. If heat pours out as fast as the pump puts it in, it has to work harder and run hotter, which cuts efficiency and pushes up bills. Where it's practical, sorting insulation first makes the heat pump work better (and you no longer need to do it before claiming the grant).

No suitable outdoor space. An air-source unit is roughly the size of a washing machine and needs clear space around it for airflow. Flats and homes with no usable external wall or ground space are a poor fit for a standard air-source system.

Listed buildings and conservation areas. Permitted-development rights don't apply to listed buildings or scheduled monuments, and conservation areas have extra restrictions — so you may need full planning permission, which can complicate or delay an installation.

Homes that can only be kept warm at high flow temperatures. If your radiators are old or undersized and can't be upgraded, the heat pump is forced to run hot and inefficient. These homes usually need radiator upgrades first, or a costlier high-temperature heat pump.

Households that will stay on a standard electricity tariff. As above — without a heat-pump or time-of-use tariff, the running-cost savings often don't materialise. If you're not willing to switch tariff, factor that into your decision.

How to get it right

If your home is a reasonable fit, a heat pump is a genuinely sound long-term move — quieter, lower-carbon, and with the grant doing most of the upfront work. To give yourself the best shot at good running costs: insist on a proper heat-loss survey; use an MCS-certified installer (it's required to get the grant anyway); get three quotes and compare them properly; line up a heat-pump or time-of-use tariff before you switch on; and improve insulation first where it's practical.

Do those five things and you've removed most of the ways a heat pump disappoints people. Skip them — especially the survey and the tariff — and you're relying on luck.