The £7,500 heat pump grant still leaves £5,408 to find

Your boiler's making that noise again, the one the engineer shrugged at last winter and said would probably see you through another year. This time he's less optimistic: it's fifteen years old, parts are getting harder to source, and it's probably not worth another repair bill. So you do what most people do and search "heat pump grant," and up pops a headline about £7,500 off. For a moment it feels like the government is handing you a new heating system for next to nothing. Then you start getting actual quotes, and the sums stop adding up quite so neatly.

Here's the number that matters: the Boiler Upgrade Scheme does pay up to £7,500 towards a heat pump, but the government's own data on real installations puts the typical job at £12,908 (Department for Energy Security and Net Zero, Boiler Upgrade Scheme statistics: July 2026, published 27 August 2026, covering installations between April and June 2026). Take the grant off that and you're still finding roughly £5,408. That's not the "free heating system" the headline implies, and if your budget is built around the £7,500 figure alone, you're about to be short by more than you think.

What the £7,500 grant actually pays for

The Boiler Upgrade Scheme, run by Ofgem on behalf of the government, pays £7,500 towards an air source, ground source or water source heat pump for homeowners in England and Wales, provided you currently have a fossil fuel or non-heat-pump electric heating system (Energy Saving Trust, Boiler Upgrade Scheme guidance, last updated 16 July 2026). Air-to-air heat pumps attract a smaller £2,500 grant and biomass boilers get £5,000. You don't apply for the money yourself: your MCS-certified installer deducts it from your quote and claims it on your behalf, so it never touches your bank account.

There's also a temporary boost worth knowing about. From 21 July 2026 to 31 March 2027, homes that are off the gas grid and currently heated by oil or LPG can get £9,000 instead of £7,500, a 20% uplift aimed at the households with the highest fuel costs to escape (Energy Saving Trust, updated 16 July 2026). If that's you, the maths below looks meaningfully better than it does for a typical gas-connected home.

So if you're picturing a flat £7,500 cheque covering "most" of the job, recalibrate: it's a fixed discount on a bill that, for most homes still on mains gas, runs well into five figures.

The bill the grant doesn't touch

That £12,908 median cost isn't a rough guess. It comes from Ofgem's own record of what installers actually charged for real, grant-funded jobs between April and June 2026, with the middle half of installations costing between £11,128 and £15,627 (DESNZ, Boiler Upgrade Scheme statistics: July 2026). Subtract the standard £7,500 grant and a mains-gas household is left paying around £5,408. Subtract the enhanced £9,000 off-gas-grid rate instead and that drops to roughly £3,908, much closer to what a straightforward boiler swap would cost.

What that headline figure doesn't automatically include is the knock-on work some homes need to make a heat pump function properly. Heat pumps run at a lower flow temperature than a gas boiler, so many homes need radiators roughly two and a half times larger to deliver the same heat, typically adding around £3,000 for the upgrade (Checkatrade, 2026 pricing data). A heat-pump-ready hot water cylinder, if you don't already have a suitable one, runs a further £1,100 to £2,200 (Checkatrade, 2026). None of that is folded into the fixed £7,500 or £9,000 grant, which stays the same whether your total job costs £11,000 or £16,000. You aren't required to insulate your home to qualify for the scheme either, but installers commonly recommend it, and that's another cost that sits entirely outside the grant (Energy Saving Trust, updated 16 July 2026).

So before you get a firm quote, ask your installer directly whether your current radiators and cylinder are already heat-pump-ready. If they're not, that's real money the "£7,500 off" headline never mentioned, and it lands on your invoice, not the government's.

Boiler versus heat pump: the real cash comparison

Line the two options up side by side. A like-for-like new gas boiler costs around £3,000 to supply and install (HomeOwners Alliance, updated 30 July 2026). A heat pump on mains gas, after the standard £7,500 grant, costs around £5,408 at the median, a gap of roughly £2,408. Energy Saving Trust modelling for a typical three-bedroom semi puts the annual bill saving from switching an old gas boiler to a heat pump at around £260 a year (via HomeOwners Alliance, updated 30 July 2026), which means it takes just over nine years to recoup that extra £2,408 through lower running costs, longer than the "over seven years" figure often quoted, because it's based on the fresher, higher £12,908 government install-cost figure rather than an older estimate.

If your home also needs the radiator and cylinder work described above, the gap widens considerably. Add £3,000 for radiators and £1,100 to £2,200 for a cylinder to the £2,408 baseline gap, and you're looking at total extra spend of roughly £6,500 to £7,600 against the boiler option, pushing the payback period out to somewhere between 25 and 29 years on bill savings alone, comparable to the 27-year payback the same modelling shows for a ground source heat pump.

One myth worth killing outright: you cannot keep your existing gas boiler running as backup and still claim the grant. Hybrid systems, where a heat pump sits alongside a retained fossil fuel boiler, aren't eligible for the £7,500 at all (Energy Saving Trust FAQ, updated 16 July 2026), and Checkatrade prices a typical hybrid installation at around £16,000 with no grant support whatsoever. So if part of the appeal was hedging your bets with a boiler still connected, that option is both more expensive and ineligible.

Who the scheme is actually built for

The Boiler Upgrade Scheme only covers England and Wales. Scotland runs the separate Home Energy Scotland Grant and Loan, worth up to £15,000 combined (£7,500 grant plus up to £7,500 loan), with an extra £1,500 grant for qualifying rural properties, and Northern Ireland's previous Boiler Replacement Scheme has closed, leaving no direct equivalent currently open there. New-build homes are generally excluded too, unless a fossil fuel boiler was already fitted before you moved in.

The households the current scheme design genuinely favours are those off the gas grid on oil or LPG, where the enhanced £9,000 grant and typically higher existing fuel bills both push the maths in the heat pump's favour, and homes that already have suitably sized radiators and a compatible cylinder, where there's no extra work to fund on top of the net cost. If neither applies to you and your existing boiler is still limping along, that changes the urgency of the decision considerably.

Getting your annual home maintenance calendar up to date is a useful first step regardless of which route you take, since a boiler that's been properly serviced every year tends to fail more predictably than one that hasn't, giving you time to plan rather than replace in an emergency. If yours is already under warranty, it's also worth checking whether boiler cover is actually worth paying for before you factor a replacement into this year's budget at all. So work out which camp you're actually in before you get quotes: the scheme is genuinely generous if you're off the gas grid or already heat-pump-ready, and a much smaller discount than it looks if you're not.

What this means for you

If your boiler is on its last legs and money is tight this year, the maths points toward a straightforward like-for-like boiler swap as the responsible default, not the heat pump the grant headline nudges you towards. Get a written, itemised quote from an MCS-certified installer before you plan around the £7,500 or £9,000 figure specifically, and ask them to state upfront whether your existing radiators and cylinder are heat-pump-ready or whether that's extra. Frankly, if you're weighing this up against other jobs on the house, the same personal-loan-versus-secured-loan-versus-savings comparison that applies to financing a kitchen renovation is worth running here too, because a £5,000-£8,000 net cost is a similar scale of decision. Most people who run these numbers end up doing one of two things: fitting a straight replacement boiler now and revisiting a heat pump when they're already doing wider work like new radiators or loft insulation anyway, or, if they're off the gas grid, moving now while the boosted £9,000 grant is available before it reverts to £7,500 after 31 March 2027. Either way, working through your own new homeowner checklist of priorities before you commit to either option will save you from budgeting around the grant amount alone.