Is a Heat Pump Cheaper Than Gas After the 2026 Budget?
Yes. After the Budget, a heat pump costs less to run than a gas boiler in a typical home. A small home saves about £150 a year on the standard price cap and a large home about £330. On a heat pump tariff, the saving reaches £467 a year.
Geek Notes
Scrapping the gas standing charge puts about 1.14p on every unit of gas, and electricity gets no new levies. A heat pump now needs a SCOP of about 2.8 to beat an 85% efficient boiler, down from 3.2. A typical home saves £151 to £334 a year on the price cap, or up to £467 on a heat pump tariff. Heat Geek designs run from 3.4 to 5.0.
What the Budget Changed
The Budget on 28 October 2026 made three decisions that favour heat pumps:
- Ofgem will scrap the gas standing charge. It moves the £108 a year into the price of each unit of gas, taking gas from about 7.97p to 9.11p per kWh.
- The government won't add new levies to electricity. That holds until it sets a new cost framework in 2027, unless a levy brings bills down.
- The government will cut the link between electricity and gas prices. It has planned that work for 2028 to 2030.
Gas goes up per unit, while electricity holds with cuts planned. A boiler burns gas and a heat pump runs on electricity, so the gap between your two possible bills widens.
A Lower Bar to Beat Gas
A heat pump makes several units of heat from each unit of electricity. Engineers call that its SCOP, and a higher number means a cheaper bill.
On January's forecast prices, a heat pump needed a SCOP of about 3.2 to beat an 85% efficient gas boiler. After the Budget, it needs about 2.8.
Heat Geek designs run from 3.4 to 5.0. Your quote states the efficiency we design your system to hit, and we guarantee it.
What It Saves Your Home
| Home | Gas after the Budget | Heat pump, price cap | You save | Heat pump, Cosy Octopus | You save |
|---|---|---|---|---|---|
| Small (flat or 2-bed terrace) | £638 | £487 | £151 a year | £427 | £211 a year |
| Medium (3-bed semi) | £865 | £661 | £205 a year | £579 | £287 a year |
| Large (4-bed or detached) | £1,412 | £1,078 | £334 a year | £945 | £467 a year |
Estimates for a typical home with a heat pump at SCOP 3.7, using the Ofgem price cap and the January 2027 forecast. Your home and tariff will change the figures.
See what the Budget means for your home. Our Budget 2026 heat pump calculator shows your gas bill, your heat pump bill and the gap between them. Pick your home size and tariff to start.
Bigger Homes Save More
A large home burning 15,500 kWh of gas a year pays about £68 more for gas after the Budget. A heat pump burns no gas, so that rise never reaches you. Most of the homes we fit sit at the larger end, where the saving grows biggest.
The Right Tariff Adds More
A heat pump tariff like Cosy Octopus charges less for electricity at set times, and your heat pump can do much of its work then. In a 3-bed semi, that lifts the saving from £205 to £287 a year. In a 4-bed or detached home, it goes from £334 to £467.
Keep the Hob for £27 a Year
Want to keep cooking on gas? Today a gas hob costs you the full £108 standing charge. Once Ofgem scraps it, cooking on gas costs about £27 a year.
What You Pay Upfront
- £7,500 off through the Boiler Upgrade Scheme in England and Wales, or £9,000 if your home runs on oil or LPG. The Budget confirmed it for 2027-28, and we claim it for you and take it off your price.
- The Home Energy Scotland grant in Scotland. You apply yourself with your quote, and it pays out after your install. See which grant you can get.
- The Warm Homes Loan Scheme lets you spread the rest.
After the £7,500 grant, Heat Geek installs in England and Wales start from:
| Home | From, after the £7,500 grant |
|---|---|
| Small (flat or 2-bed terrace) | £5,200 |
| Medium (3-bed semi) | £6,600 |
| Large (4-bed or detached) | £8,100 |
Median 2026 Heat Geek quotes for each home size. Add-ons cost extra.
Design Decides Your Saving
Every number on this page assumes a heat pump that hits its efficiency. A weak design can fall short of the bar, while a good one clears it with room to spare.
- The right design. We design every system around your home, balancing what you pay upfront against what it costs to run.
- The right installer. A certified Heat Geek from your area fits it, trained and verified to our standard.
- The right result. Your heat pump reports its performance every 15 minutes, and we check it over a full year of real use. Heat pumps we've fitted make a median 3.9 units of heat for every unit of electricity, measured across 813 homes over a full year.
A heat pump can work in almost any UK home with the right design. If yours is the exception, or a heat pump won't save you money, we'll tell you before you spend anything.
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Sources
- GOV.UK: Budget 2026: Breathing space for today, hope for the future
- GOV.UK: Boiler Upgrade Scheme
- Running costs and install prices: the Heat Geek Budget 2026 calculator, using the Ofgem price cap (October to December 2026), the Cornwall Insight January 2027 forecast and median 2026 Heat Geek quotes.
Last updated 28 October 2026. We'll update this page as Ofgem confirms dates and rates.
