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Heating Guide • 2026

Heat Pump vs Gas Boiler: Running Costs, Efficiency & the £7,500 Grant Explained

By Boilers On-DemandJanuary 20266 min read

The gas boiler has been the default choice for UK homes for decades. But with rising energy costs and a government grant worth up to £7,500 now available, more homeowners are asking whether a heat pump makes more sense.

Here's an honest comparison — no greenwashing, no hard sell.

How a Gas Boiler Works

A gas boiler burns gas to heat water, which circulates through radiators and provides hot water on demand. It's a proven, well-understood technology that most UK homes are already set up for.

How an Air Source Heat Pump Works

An air source heat pump extracts heat from the outside air and transfers it into your home. It runs on electricity, produces no direct emissions, and for every unit of electricity it uses, it generates 3–4 units of heat.

Coefficient of Performance Explained

That ratio — called the Coefficient of Performance — is what makes the efficiency case. A heat pump producing 3 units of heat per unit of electricity is operating at 300% efficiency by conventional measures. No gas boiler, however well-maintained, can match that ratio.

Running Costs: Heat Pump vs Gas Boiler

This is where the comparison gets nuanced.

Heat pumps use electricity, which currently costs more per unit than gas in the UK. However, because a heat pump produces 3–4 units of heat per unit of electricity used, the actual running costs are comparable — and for well-insulated homes, often lower.

As a rough guide for an average UK home:

Annual Running Cost Comparison

SystemEstimated Annual Running Cost
Modern gas boiler (A-rated)£900 – £1,400
Air source heat pump£800 – £1,500

The range reflects variation in property insulation, size, and usage patterns. The gap narrows as electricity prices fall and gas prices remain volatile.

Gas Boiler Lifespan vs Heat Pump Lifespan

The bigger picture: a heat pump system lasts 20+ years. A gas boiler typically 10–15. Long-term, the heat pump often wins on total cost of ownership.

The £7,500 Boiler Upgrade Scheme Grant

The UK government's Boiler Upgrade Scheme offers eligible homeowners up to £7,500 toward the cost of an air source heat pump installation. The grant runs until 2028.

You don't receive the money directly. Your MCS-accredited installer applies on your behalf, and the saving comes straight off your installation cost.

Up to £7,500 available through the Boiler Upgrade Scheme until 2028.

Heat Pump Installation Costs in the UK

A fully installed air-to-water heat pump system typically costs £8,000–£13,000. After the grant, the real cost for most eligible homeowners drops to £500–£5,500.

MCS-Accredited Installation Explained

As an MCS-accredited installer registered for the Boiler Upgrade Scheme, we manage the entire application — from eligibility check to paperwork — on your behalf.

Which Heating System Is Right for Your Home?

When a Gas Boiler Still Makes More Sense

A gas boiler is likely the better choice if:

  • Your home has poor insulation and you can't improve it in the near term
  • You need a like-for-like replacement quickly
  • Your property isn't suitable for an outdoor unit

What Homes Are Suitable for Heat Pumps?

A heat pump is worth serious consideration if:

  • Your home is reasonably well-insulated
  • You have or are planning underfloor heating
  • You're thinking long-term — lower carbon, lower running costs over a 20-year horizon
  • You want to take advantage of the £7,500 grant before it closes

The honest answer is: every property is different. A free survey tells you which system suits yours — without pressure either way.

Frequently Asked Questions

Are heat pumps cheaper to run than gas boilers?
In well-insulated homes, heat pumps can match or beat the running costs of modern gas boilers because they produce 3–4 units of heat for every unit of electricity used.
What is the Boiler Upgrade Scheme?
The Boiler Upgrade Scheme is a UK government grant offering eligible homeowners up to £7,500 toward an air source heat pump installation.
Do I receive the £7,500 grant directly?
No. The installer applies for the grant on your behalf and the amount is deducted directly from the installation cost.
Is a gas boiler or heat pump better for older homes?
Older homes with poor insulation may still be better suited to gas boilers unless insulation upgrades are planned.
How long does a heat pump last?
An air source heat pump typically lasts 20 years or more, compared to around 10–15 years for a gas boiler.

Check Your Eligibility for the Boiler Upgrade Scheme

We'll check your eligibility for the Boiler Upgrade Scheme grant in minutes — no obligation, no cost.

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