On 21 April 2026, the Department for Energy Security and Net Zero announced an increase in Boiler Upgrade Scheme funding for properties heated by oil and LPG in England and Wales, raising the grant from £7,500 to £9,0001. The change forms part of a raft of measures within the government's broader electrification strategy, announced alongside plans intended to break the influence of gas on electricity prices1.
The uplift is temporary. It came into effect on 21 July 2026 and is anticipated to remain available until the end of March 20274. Homeowners holding a live BUS voucher can only claim £7,500; only vouchers applied for on or after 21 July 2026 are eligible for the higher level4. The £9,000 rate is not available to homes with gas central heating, and applies to eligible off-gas-grid homes reliant on heating oil or LPG only4. Rural homes in Scotland can already get a £9,000 subsidy2.
| Nation and fuel | BUS grant |
|---|---|
| England and Wales, oil or LPG | £9,000, temporary uplift4 |
| England and Wales, gas boiler | £7,5004 |
| Scotland, rural homes | £9,000 already available2 |
Nesta's analysis, based on the current energy price cap and current heating oil prices for a medium-sized home, found that a household switching from heating oil to a heat pump could save over £650 per year on energy bills3. With the higher grant, a typical detached house might expect to pay around £3,600 in upfront installation costs, while bungalows, semi-detached and terraced housing can expect to pay about £2,500, comparable to replacing an oil boiler, which typically costs between £3,500 and £5,500 for a full installation3. About 865,000 homes in England and Wales use oil as their main heating source, according to the 2021 census3.
OFTEC and UKIFDA, which represent the heating oil and fuel distribution industries, welcomed the increase but said a shortfall remains. Paul Rose, chief executive of OFTEC, and Ken Cronin, chief executive of UKIFDA, said in a joint statement:
"However, the fact remains that, even with this additional funding, oil heated households still face a significant financial shortfall. The government's own estimates put the switching cost at nearly £20,000. Most oil heated households simply do not have the disposable income available."
The two bodies also said 16,000 oil heated households responded to the government's recent consultation in support of renewable liquid fuels such as hydrotreated vegetable oil, and that Building Regulations in England prohibit installing a heating appliance with the potential to produce more CO2 than the appliance being replaced1. The Heat Pump Association, which represents over 400 member organisations, described the £1,500 uplift as making the transition to heat pumps more affordable6.
Why it matters for households
Off-grid households cannot benefit from the energy price cap and are exposed directly to global commodity markets through periodic deliveries, so they have little protection from price volatility2. For a home on oil or LPG, the grant changes the arithmetic of a heat pump installation: the gap between the grant and a typical installation cost narrows to figures Nesta puts at around £2,500 to £3,600 depending on property type3. That is close to the £3,500 to £5,500 range cited for a replacement oil boiler3. The Boiler Upgrade Scheme remains open to applicants in England and Wales, with grants paid to the installer and Ofgem administering the scheme4. Homes with a gas boiler remain on the £7,500 rate, so the eligibility rules now differ by heating fuel as well as by nation4. The wider context is a set of measures aimed at weakening the link between gas prices and electricity prices, which affects how far electrified heating insulates a household from fossil fuel markets3.
What happens next
The temporary uplift runs from 21 July 2026 and is anticipated to remain available until the end of March 20274. Details of the uplift, including eligibility and timing, are subject to change4. OFTEC and UKIFDA said they now need to see a formal government response to the consultation that incorporates renewable liquid fuels into the wider decarbonisation strategy1.
Sources6 cited
- OFTEC and UKIFDA respond to DESNZ announcement on Boiler Upgrade Scheme funding increase for oil and LPG users, oftec.org
- What does the UK government's heat pump grant actually mean for oil-using households’ bills? | Nesta, nesta.org.uk
- Heating oil households lined up for cheaper heat pump installations and savings of over £650 a year when switching under new government deal | Nesta, nesta.org.uk
- What is the Boiler Upgrade Scheme? Updated Blog | Grant UK, grantuk.com
- OFTEC and UKIFDA respond to DESNZ announcement on Boiler Upgrade Scheme funding increase for oil and LPG users - UKIFDA, ukifda.org
- HPA UK Welcomes BUS Uplift for Heating Oil Homes and Progress on Electricity Price Reform - HPA UK, hpauk.org.uk