The Budget on 28 October 2026 confirmed that the Boiler Upgrade Scheme will pay £7,500 towards a heat pump in England and Wales, or £9,000 where a home runs on oil or LPG, through 2027-281. The same Budget capped ongoing scheme funding at £400 million a year, with future uplifts tied strictly to inflation3.
Nesta, the research and innovation foundation, said the cap holds funding for 2027/28 at the same level as 2026/27 "instead of increasing as planned prior to the Budget", and that the grant will rise in line with inflation in subsequent years3. Nesta also said the grant is available for the next three financial years3. The grant amount guide sets out the current rates.
The confirmation followed official figures, published by the Department for Energy Security and Net Zero the day before Nesta's release, showing applications to the scheme surged to nearly 10,000 in September 2026, the highest monthly total on record and a 118% jump since June3. Nesta attributed the surge to a combination of off-grid households using the £9,000 uplift and narrowing running costs between electricity and gas3.
"The Budget’s cap on the Boiler Upgrade Scheme means that anyone interested in switching is effectively now on the clock to apply while the funding pot is available."
Heat Geek, a heat pump installer, said the Budget "made three decisions that favour heat pumps": Ofgem will scrap the gas standing charge, moving the £108 a year into the price of each unit of gas and taking gas from about 7.97p to 9.11p per kWh; the government will not add new levies to electricity until it sets a new cost framework in 2027, unless a levy brings bills down; and it will cut the link between electricity and gas prices, with that work planned for 2028 to 20301. Heat Geek put the effect on running costs as follows, using the Ofgem price cap and a January 2027 forecast, for a heat pump at SCOP 3.71:
| Home | Gas after the Budget | Heat pump, price cap | Saving a year |
|---|---|---|---|
| Small (flat or 2-bed terrace) | £638 | £487 | £151 |
| Medium (3-bed semi) | £865 | £661 | £205 |
| Large (4-bed or detached) | £1,412 | £1,078 | £334 |
On a heat pump tariff, Heat Geek put the annual saving at £211, £287 and £467 respectively1. It said a heat pump needed a SCOP of about 3.2 to beat an 85% efficient gas boiler on January's forecast prices, and about 2.8 after the Budget1. These are one installer's estimates and have not been independently verified in the published material.
Why it matters for households
The grant levels for 2027-28 are now settled, but the £400 million annual cap means the total support available in a year is fixed, and Nesta's warning is that demand is running at record levels3. For a household weighing up a switch, the upfront contribution is known while the room left in the pot is not. The eligibility guide covers which homes and systems qualify, and the cost with the grant page sets out what remains to pay. Homes with a gas boiler can check their position in the gas boiler eligibility guide, and those comparing support routes can read Boiler Upgrade Scheme vs ECO4.
On running costs, the shift in the gas standing charge and the hold on new electricity levies narrow the gap between gas and electric heating, which bears on how far a heat pump reduces a home's exposure to gas prices, the subject of the guide to grants, schemes and household energy independence.
What happens next
The gas standing charge is due to go by the end of 2027 or soon after, with Ofgem moving the cost into the price of each unit of gas2. The government is due to set a new cost framework for electricity in 2027, and to carry out work on cutting the link between electricity and gas prices in 2028 to 20301. A £100 Household Energy Payment is to be paid into bank accounts from January 2027 for households in Council Tax bands A to D in England, and VAT is to stay off electricity until 1 July 20272.