Heat pump grants could be cut — what it means for your costs now

Ministers are reportedly considering cuts to household heat pump grants, with the savings potentially redirected towards defence spending, according to The Cool Down. The outlet reported that the changes under discussion could reduce or end support worth up to £9,000 per household, citing reporting by the Morning Star.

The Cool Down also reported, via the Morning Star, that heat pump installations linked to the grant scheme rose 56% in 2024 and a further 7% after that, which campaigners cited as evidence that the support has helped the market grow rather than serving a small niche. Greenpeace UK's head of climate, Mel Evans, was quoted warning that cutting support would deepen Britain's reliance on imported gas and oil. The Department for Energy Security and Net Zero reportedly told the Morning Star that any savings from the defence review are "a small part" of its overall budget, and that it will "set out how we will fund essential investment in our national security this autumn."

No decision has been confirmed. But if you're weighing up a heat pump this winter, here's what today's support is actually worth, and what you'd pay with and without it.

What the current scheme offers

Under the fact sheet we use for UK grants:

• In England and Wales, the Boiler Upgrade Scheme currently offers £7,500 off an air source or ground source heat pump, as long as the installer is MCS certified.
• In Scotland, Home Energy Scotland offers a grant of up to £7,500, plus an optional interest-free loan of up to £7,500.
• Heat pump installations also carry 0% VAT until 31 March 2027, as part of the broader relief on energy-saving materials.

Those figures sit below the £9,000 figure cited in the reporting above, which appears to describe a larger support package under discussion rather than the scheme as it currently stands. If you're planning a heat pump install, it's worth checking the live terms with your installer before committing, since subsidy levels can change quickly around budget reviews.

What a heat pump costs right now

For an 8 kW air source heat pump — a typical size for a three- or four-bedroom home — our live cost model puts a mid-range installation at £12,900, with most jobs landing in the £10,000 – £16,700 range before any grant is applied. Budget installs start around £9,700, and premium specifications (bigger systems, higher-end controls, more complex plumbing) can run to £15,400.

With the current £7,500 Boiler Upgrade Scheme grant applied, a typical install effectively falls to somewhere in the low-to-mid thousands, before 0% VAT further reduces the bill compared with a standard 20%-VAT project. That combination is a big part of why many households have found heat pumps more affordable over the past two years than the headline cost suggests — and why any reduction in grant support would land directly on homeowners' up-front costs rather than on running costs.

For full details on sizing, running costs and how we build the estimate, see our Air source heat pump guide.

How this compares with a new gas boiler

If grant support does shrink, some households may stick with gas for longer. A straight like-for-like combi boiler replacement currently costs £2,800 typically, within a £2,200 – £3,650 range — cheaper up-front than a heat pump even with the grant removed, though running costs and future gas prices are the trade-off, not something we estimate here. See our New boiler guide for that comparison in more detail.

What we'd suggest

If you're already planning a heat pump installation, it's worth getting quotes sooner rather than later while the £7,500 Boiler Upgrade Scheme grant and 0% VAT are both confirmed and in place. Get more than one quote from MCS-certified installers, and use our "is my quote fair" tool to check a quote against local labour and materials costs before you sign anything — that's especially useful if a scheme change means you're trying to move quickly.

We build our heat pump cost figures from labour hours multiplied by local trade rates, plus materials, then check the result against market prices and real quotes — so the figures above reflect current UK installation costs rather than list prices from a single supplier. We'll update this page if the government confirms any change to the Boiler Upgrade Scheme or VAT relief.