The government is reportedly planning to cut funding for the Boiler Upgrade Scheme, just as the number of heat pumps being installed in the UK is starting to increase.
The scheme, which was introduced in 2022, provides grants to homeowners who want to replace their existing heating system with a heat pump. The idea is to reduce the upfront cost of installation, which remains one of the biggest barriers to people switching away from gas and oil boilers.
But the government is now looking at reducing the amount of money available to fund the scheme. So what exactly is being proposed, and what might it mean if you’re thinking about installing a heat pump?
Why is the government considering cuts?
Perhaps surprisingly, the proposed cuts have very little to do with heat pumps themselves.
According to reports published in October 2026, the government is looking to find more than £2 billion in savings from the Department for Energy Security and Net Zero. This money would help fund an increase in defence spending.
And one of the areas being considered for cuts is the Boiler Upgrade Scheme.
The scheme has a budget of around £2.7 billion over five years, making it one of the government’s main programmes for encouraging homeowners to move away from fossil fuel heating.
It’s worth pointing out that these are reported proposals rather than confirmed changes. The government hasn’t yet announced exactly how much funding will be removed, or how this might affect individual grants.
How much is the Boiler Upgrade Scheme worth?
At present, the scheme provides the following grants:
- £7,500 towards an air-to-water heat pump.
- £7,500 towards a ground source heat pump.
- £9,000 for eligible homes without mains gas which are replacing an oil or LPG heating system.
- £2,500 towards an eligible air-to-air heat pump.
The £9,000 grant is available until March 2027 under the current arrangements.
These are fairly substantial amounts of money, particularly when you consider that the installation of a typical air source heat pump can cost somewhere between £8,000 and £15,000.
In some cases the grant can cover most of the installation cost.
Does this mean heat pump grants are being reduced?
Not necessarily.
There is an important difference between reducing the overall budget for the scheme and reducing the amount of money available to individual homeowners.
For example, the government could keep the existing £7,500 grant but limit the number of installations it funds each year. Alternatively, it could reduce the grant itself.
At the moment we don’t know which approach the government might take.
There is also the question of what happens to the heat pump industry. Manufacturers and installers have invested considerable amounts of money in expanding their operations, partly on the assumption that government support will continue.
Reducing this support could make it more difficult for the industry to grow.
Should you wait before installing a heat pump?
If you’re already considering installing a heat pump, there probably isn’t much reason to delay your plans because of these announcements.
The existing grants haven’t been withdrawn, and there is no confirmed timetable for reducing them.
However, we would advise checking the latest eligibility requirements before committing to an installation.
As a final note, we’ll continue to follow developments with the Boiler Upgrade Scheme and update this article as more information becomes available.