The Resolution Foundation published a report, "Turning up the heat", on 10 April 2025, examining how the transition from gas boilers to heat pumps affects low-income households. The report finds the rollout slow and uneven, and sets out recommendations on subsidies, regulation and the way policy costs are levied on bills1.
Fewer than 100,000 heat pumps were fitted into British homes in 2024, according to the report. It also finds the rollout is uneven: 45 per cent of those installed to date are in the richest parts of the country, and 73 per cent are in places with the lowest population densities. In 2024, a similar number of heat pumps were installed through fuel poverty schemes as through grants that all homeowners could access1.
On running costs, the report says most families can expect their energy bills to increase slightly when replacing a gas boiler with a heat pump, with energy costs rising by £32 per year on average. Just one-third of households are set to save at all, though those replacing the oldest and least efficient gas boilers will see big upsides. The report attributes this to electricity unit prices being four times those of gas, which it says means the higher efficiencies of heat pumps do not feed through into lower bills1.
The report also sets out how heating costs weigh on household budgets. It says heating accounts for 7 per cent of disposable incomes for poorer families, compared with 1.5 per cent for the richest. On the cost of the equipment itself, it says heat pump costs have fallen by just 6 per cent in the past five years1.
"The nascent state of the heat pump rollout means that now is not the time to remove grants available to homeowners."
The report recommends additional, more generous, means-tested subsidies for vulnerable families, alongside clear regulatory changes on the retrofit of heating systems and on new homes. It proposes moving policy costs from electricity to gas bills, which it says would make low carbon heating cheaper to run without a substantial bill for the exchequer. It also suggests a social tariff so that vulnerable families remaining reliant on gas boilers are not exposed to additional costs1.
| Finding | Figure |
|---|---|
| Heat pumps fitted in British homes, 2024 | Fewer than 100,000 |
| Installed in the richest parts of the country | 45 per cent |
| Installed in places with the lowest population densities | 73 per cent |
| Average annual energy cost change, gas boiler to heat pump | +£32 |
| Households set to save at all | One-third |
| Fall in heat pump costs over five years | 6 per cent |
| Heating as share of disposable income, poorer families | 7 per cent |
| Heating as share of disposable income, richest | 1.5 per cent |
Why it matters for households
For a household weighing up replacing a gas, oil or LPG boiler with a heat pump, the report's central point is that the running cost gap between electricity and gas shapes the outcome more than the efficiency of the equipment. A heat pump that uses less energy can still produce a higher bill while electricity unit prices stand at four times those of gas, which is the mechanism behind the £32 average increase1. The report's own figures show the result is not uniform: households replacing the oldest and least efficient boilers come out ahead, while most others do not1.
That matters for home heating running costs by fuel, because the comparison between a heat pump and a gas boiler turns on the price per unit of each fuel rather than on the amount of heat delivered. The report's proposal to shift policy costs from electricity to gas bills is aimed directly at that ratio1. For households on lower incomes, where heating takes 7 per cent of disposable income against 1.5 per cent for the richest, a small change in the running cost of the main heating system has a proportionally larger effect on the household budget1.
The distribution of installations also bears on household energy independence: with 45 per cent of installations in the richest areas and 73 per cent in the least densely populated places, the households with the least capacity to absorb the upfront cost are the least likely to have made the switch so far1.
What happens next
The report calls on the Government, as it sets out the future of grant schemes, to acknowledge that costs remain too high for many families and to introduce additional means-tested subsidies for vulnerable families. It also calls for regulatory changes on heating system retrofits and new homes, and for a social tariff for vulnerable families still reliant on gas boilers1. No timetable for any of these measures is given in the report.
Sources1 cited
- Turning up the heat • Resolution Foundation, resolutionfoundation.org