Heat Pump Grant 2026: Get £7,500 Off
The Boiler Upgrade Scheme gives you £7,500 towards an air source or ground source heat pump. Combined with 0% VAT, you could save over £10,000. Here is everything you need to know about heat pump grants in 2026.
£7,500
BUS grant (ASHP)
£7,500
BUS grant (GSHP)
0%
VAT rate
Eng & Wales
Available in
Quick summary
What heat pump grants are available in 2026?
Boiler Upgrade Scheme (BUS): £7,500 off an air source or ground source heat pump. Available to homeowners in England and Wales replacing fossil fuel heating. Your MCS-certified installer applies on your behalf.
ECO4 scheme: Free or heavily subsidised heat pump for low-income households and those on qualifying benefits. Covers insulation upgrades too.
0% VAT: No VAT on heat pumps and installation since April 2022. This saves £1,500–£3,000 on a typical installation.
Local authority grants: Some councils run their own schemes, especially for off-gas-grid properties. Check with your local council.
Boiler Upgrade Scheme (BUS) - £7,500 Grant
The Boiler Upgrade Scheme is the main government grant for heat pumps. It was launched in 2022 and the grant amount was increased from £5,000 to £7,500 in October 2023.
Grant amounts
Air source heat pump
Air-to-water systems only - air-to-air does not qualify
£7,500
Ground source heat pump
Including water source and shared ground loop systems
£7,500
Biomass boiler
Off-gas-grid rural properties only - additional restrictions apply
£5,000
Eligibility criteria
You must own the property
Homeowners, landlords, and owners of second homes are all eligible. Tenants cannot apply directly - the property owner must apply. Social housing is excluded.
You must be replacing fossil fuel heating
The scheme covers properties switching from gas, oil, LPG, or electric heating to a heat pump. You cannot claim the grant if you are adding a heat pump to a property that already has renewable heating.
You must have a valid EPC
An Energy Performance Certificate must be lodged for the property. If you do not have one, you will need to commission an EPC assessment before your installer can apply for the grant. This costs £60–£120.
The installer must be MCS-certified
Only MCS-certified installers can apply for the grant. This is non-negotiable - a non-MCS installer cannot access the scheme, regardless of their qualifications. Check the MCS installer register at mcscertified.com.
One grant per property
You can only receive one Boiler Upgrade Scheme grant per property. If you have already received a grant, you cannot apply again for the same property.
Not eligible: Most new build properties, social housing, and properties that have already received government funding for heating systems. Hybrid heat pumps and air-to-air systems do not qualify.
How to apply - step by step
- 1
Get quotes from MCS-certified installers
Contact 2–3 MCS-certified heat pump installers in your area. They will survey your property and provide quotes. You can find MCS installers at mcscertified.com/find-an-installer.
- 2
Choose an installer and agree the quote
Compare quotes, check reviews, and choose an installer. The quote should show the full cost before the grant, the £7,500 BUS deduction, and the amount you pay. Make sure 0% VAT is applied.
- 3
Your installer applies to Ofgem
Your installer submits the application through Ofgem's online portal. They need your property details, EPC reference, and confirmation of your existing heating system. You do not need to do anything at this stage.
- 4
Voucher issued (usually within a few days)
If approved, Ofgem issues a voucher. The installation must be completed within 120 days of the voucher being issued. If it expires, your installer would need to reapply.
- 5
Installation and commissioning
The heat pump is installed and commissioned. Your installer redeems the voucher with Ofgem and receives the £7,500 directly. You only pay the balance - the grant amount is never money you handle yourself.
Official source: Full details of the Boiler Upgrade Scheme are on gov.uk/apply-boiler-upgrade-scheme. The scheme is administered by Ofgem. Find an MCS-certified installer at mcscertified.com.
ECO4 Scheme - Free Heat Pumps for Low-Income Households
The Energy Company Obligation (ECO4) required large energy suppliers to fund energy efficiency improvements in fuel-poor and low-income homes. It ran until March 2026 and could cover the full cost of a heat pump, plus insulation upgrades, at no charge to the homeowner. A successor scheme is expected.
Who qualified for ECO4?
Low-income households on qualifying benefits
Including Universal Credit, Pension Credit, Child Tax Credit, Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance, and Housing Benefit. The full list is maintained by Ofgem.
Fuel-poor households identified by your energy supplier
Energy suppliers have their own referral routes for households in fuel poverty. If you are struggling to heat your home, contact your energy supplier directly and ask about ECO4.
Properties with low energy efficiency
ECO4 targets the least energy-efficient homes (EPC bands D–G). If your home already has a high EPC rating, it is unlikely to qualify.
Local authority referrals (LA Flex)
Your local council can refer households that do not meet the benefits criteria but are in fuel poverty. This is called the Local Authority Flex pathway. Contact your council to check.
How ECO4 differs from the Boiler Upgrade Scheme: ECO4 can cover the entire cost of the heat pump and installation - you may pay nothing. The BUS grant is a fixed £7,500 deduction. ECO4 is means-tested; BUS is available to all homeowners regardless of income. You cannot combine both schemes on the same installation.
Boiler Replacement Scheme for Over 60s - What Is Actually Available?
A lot of people search for a specific government boiler replacement scheme for over 60s. Here is what actually exists, because there is a fair amount of misleading information online.
There is no dedicated "over 60s boiler scheme"
Despite what some websites suggest, the UK government does not run a specific boiler or heat pump replacement scheme exclusively for people over 60. The grants that do exist are based on income, benefits, and property efficiency - not age alone.
What over 60s can actually access
- Boiler Upgrade Scheme (£7,500) - available to all homeowners, no age restriction. If you own your home and have fossil fuel heating, you qualify.
- ECO4 scheme - if you receive Pension Credit, you may qualify for a free heat pump or boiler replacement. Contact your energy supplier.
- Warm Home Discount - £150 off your electricity bill if you receive Pension Credit. Not a heat pump grant, but helps with heating costs.
- Winter Fuel Payment - £100–£300 per year for those born before a qualifying date. Helps with heating costs but does not fund a new system.
- Local authority grants - some councils run targeted heating schemes for older residents. Check with your local council directly.
The best starting point for older homeowners is the Energy Saving Trust advice line or your local council's housing team. They can check what you qualify for based on your specific circumstances.
0% VAT on Heat Pumps
Since April 2022, heat pumps and their installation are zero-rated for VAT in Great Britain. The 0% rate is confirmed until at least March 2027 and may be extended further.
What's covered at 0% VAT
The heat pump unit, all installation labour, associated materials (pipework, controls, cylinder), and any electrical work directly related to the installation.
What's not covered
Radiator upgrades, insulation improvements, and other building work that is not directly part of the heat pump installation. These are charged at the standard 20% VAT rate.
Typical saving
On a £12,000 heat pump installation, 0% VAT saves you £2,400 compared to the standard 20% rate. Even at the old 5% reduced rate, you save £600.
Check your invoice carefully. Some installers still charge 5% or even 20% VAT on heat pump installations by mistake. If you see anything other than 0% VAT on the heat pump and installation labour, query it. The correct rate is 0% for residential properties in Great Britain.
Local Authority Grants
Some local councils run their own heating and energy efficiency grant schemes, often funded through government programmes like the Home Upgrade Grant (HUG2) or the Social Housing Decarbonisation Fund (SHDF).
Home Upgrade Grant (HUG2)
HUG2 targets off-gas-grid homes with low-income occupants. It can fund heat pumps, insulation, and other energy efficiency measures. The scheme is delivered through local authorities - not all councils participate, and eligibility varies by area.
Typical eligibility: household income below £31,000, property off the gas grid, EPC band D–G. Contact your local council to check availability.
How to find local grants
- Contact your local council's housing or energy efficiency team directly
- Use the Simple Energy Advice tool on gov.uk to check what support is available at your postcode
- Call the Energy Saving Trust helpline on 0800 444 202 (free, impartial advice)
- Ask your MCS-certified installer - they often know which local schemes are active
All Heat Pump Grants at a Glance
A side-by-side comparison of the main schemes available in 2026.
| Scheme | Amount |
|---|---|
| Boiler Upgrade Scheme | £7,500 |
| ECO4 | Up to 100% |
| HUG2 | Varies |
| 0% VAT | ~£1,500–£3,000 saving |
| Warm Home Discount | £150/year |
Frequently Asked Questions
How much is the Boiler Upgrade Scheme grant for a heat pump?
The Boiler Upgrade Scheme provides £7,500 towards the cost of an air source or ground source heat pump. The grant is applied directly to your installation invoice by your MCS-certified installer - you do not pay the full price and claim it back. One grant is available per property.
Who is eligible for the Boiler Upgrade Scheme?
You must own the property (including landlords and second homes), be replacing an existing fossil fuel heating system (gas, oil, LPG, or electric), and have a valid Energy Performance Certificate (EPC). The scheme is available in England and Wales. Most new build properties and social housing are excluded.
Is there a free boiler replacement scheme for over 60s?
There is no specific free boiler or heat pump replacement scheme exclusively for over 60s. However, older homeowners on low incomes or certain benefits may qualify for free or heavily subsidised heating upgrades through the ECO4 scheme or the Warm Home Discount scheme. Some local authorities also run their own grants targeting older residents. Contact your local council or the Energy Saving Trust helpline to check what is available in your area.
How do I apply for the Boiler Upgrade Scheme?
You do not apply directly. First, get quotes from MCS-certified heat pump installers. Choose an installer and agree a quote. Your installer then applies to Ofgem on your behalf. If approved, the £7,500 is deducted from your invoice. The installation must be completed within 120 days of the application.
Do I have to pay VAT on a heat pump?
No. Since April 2022, heat pumps and their installation are zero-rated for VAT in Great Britain (0% instead of the standard 20%). This applies to the heat pump unit, installation labour, and associated materials. Make sure your installer is applying the correct VAT rate on their invoice.
Can I get the Boiler Upgrade Scheme grant if I rent my home?
If you are a tenant, you cannot apply directly - the property owner (landlord) must apply. Landlords are eligible for the Boiler Upgrade Scheme on rental properties. If you rent from a housing association or council, the ECO4 scheme may cover heating upgrades instead.
What is the ECO4 scheme and how does it help with heat pumps?
ECO4 (Energy Company Obligation 4) is a government scheme that requires large energy suppliers to fund energy efficiency improvements in low-income and fuel-poor households. It can cover the full cost of a heat pump plus insulation upgrades. Eligibility is based on income, benefits status, and the energy efficiency of your home. Contact your energy supplier or local council to check if you qualify.
Written by James Carter, Less.co.uk energy specialist
Last updated: · Based on gov.uk and Ofgem data · Methodology
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