Yes. If you are eligible for the Boiler Upgrade Scheme or ECO4, you can expect to save £40-£100 per month, or more with the right tariff, after installation. But only if you know what you are doing and don’t fall into the rookie mistakes most homeowners make.
Now, let’s get into the numbers, the criteria for eligibility, and what you can realistically expect to save.
What Are Heat Pump Grants, Exactly?
They are basically the government’s bribe to get you to rip out your gas boiler. There are two schemes currently available: the Boiler Upgrade Scheme (BUS) and ECO4. They both cater to a slightly different demographic, but they have one thing in common: to lower your bills enough to make heat pumps a feasible choice.
The Boiler Upgrade Scheme: £7,500, No Questions Asked
BUS offers a flat £7,500 grant for air or ground source heat pumps in England and Wales. Owner-occupiers replacing fossil fuel heating systems qualify—no income checks, no lengthy approval process. Apply online, get an MCS-certified installer, and the grant goes directly to them at installation.
Installation costs typically run £8,000–£15,000. With BUS, you’re paying under £5,000 out of pocket. That changes the payback period from 10+ years to 5–7 years. Processing takes weeks, not months.
ECO4: Full Coverage for Low-Income Households
ECO4 targets households on benefits like Universal Credit with EPC ratings of D–G. The difference? It often covers 100% of installation costs, including insulation upgrades and heat pumps. You pay nothing upfront.
Eligibility is stricter—you need both the EPC rating and qualifying benefits. But if you qualify, you’re getting a complete heating overhaul funded entirely by your energy supplier. Contact them directly to start the assessment.
Grant Comparison
| Scheme | Max Grant | Eligibility | Income Check | Typical Out-of-Pocket |
| BUS | £7,500 | Owner-occupiers replacing fossil fuels | No | £500–£7,500 |
| ECO4 | Full cost | Benefits recipients, EPC D–G | Yes | £0 |
Why does this matter? Because grants turn heat pumps from “nice idea” to “financially smart decision.” Without them, most households can’t justify the upfront expense.
How Much Do Heat Pumps Actually Save Per Month?
Here’s where the data gets interesting. Heat pumps operate at 300–400% efficiency (SCOP 3.0+), meaning they extract three times more heat than the electricity they consume. Gas boilers? They cap out at 85–92% efficiency.
The Math on a Typical UK Home
An average UK home uses 11,500 kWh annually for heating. On a gas boiler under the Ofgem price cap, you’re paying roughly £1,302 per year—£108 monthly. Switch to an air source heat pump, and that drops to £1,156 annually (£96 monthly) with standard tariffs.
That’s £12 monthly savings baseline. Not impressive yet, is it?
Where Real Savings Happen: Tariffs and Insulation
Pair your heat pump with an off-peak tariff (15p/kWh vs. 26p standard), and monthly costs plummet. Octopus Energy users consistently report £40–£100 monthly savings using time-of-use tariffs. Add cavity wall and loft insulation through ECO4, and you boost efficiency another 20–30%.
Now you’re saving £260+ annually compared to gas—£21 per month minimum, scaling up to £60+ with optimized setups.
Annual Running Costs by System
| Heating System | Annual Cost | Monthly Bill | Efficiency |
| Gas Boiler | £1,302 | £108 | 85–92% |
| Air Source HP | £1,156 | £96 | 300%+ |
| Ground Source HP | £1,099 | £92 | 400% |
Real-world example: A retiree using the Warm Homes plan installed a heat pump funded by the £7,500 BUS grant plus bank cashback. Monthly heating bills dropped from £118 to £55—£63 saved every month.
Who Qualifies for These Grants?
Not everyone. Let’s be blunt about eligibility.
Check Your EPC Rating First
Visit gov.uk and pull your property’s Energy Performance Certificate. Ratings D–G qualify for ECO4 if you’re on benefits. BUS doesn’t care about your EPC—just that you’re replacing a fossil fuel system.
Benefits Requirements for ECO4
You need Universal Credit, Pension Credit, Child Benefit (income-related), or similar. Energy suppliers verify this directly. No benefits? BUS is your only option.
The Application Process: Faster Than You Think
BUS applications process in weeks. Apply online, get matched with an MCS-certified installer, schedule a technical survey to confirm proper heat pump sizing (5–12kW units for most homes), and installation follows within 4–8 weeks.
ECO4 takes longer—contact your energy supplier, schedule an assessment, wait for approval. But remember: you’re paying £0 upfront, so the wait is worth it.
How to Maximize Your Bill Reductions
Grants alone won’t get you maximum savings. You need optimization.
Insulation First, Heat Pump Second
Loft and cavity wall insulation boost heat pump efficiency 15–20%. ECO4 bundles these upgrades for free. If you’re on BUS, install insulation separately before your heat pump—it’s worth the extra spend.
Smart Thermostats and Zoning
Zoning controls let you heat only occupied rooms, cutting usage 10%. Annual cost: £0 after initial £200–£300 setup. ROI in 2–3 years.
Annual Servicing Matters
£200 yearly servicing maintains your warranty and efficiency. Skip it, and you’re risking a 10–15% efficiency drop—costing you £10–£15 monthly in higher bills.
Future-Proofing Against Gas Bans
Gas boilers face bans in new builds by 2025, full phase-out by 2035. Gas prices will rise £100+ annually as supply shrinks. Heat pumps lock in lower electricity rates long-term.
The Bottom Line
Heat pump grants reduce monthly bills by £40–£100 when paired with proper tariffs and insulation. But only if you qualify, choose the right installer, and optimise your setup. Most homeowners leave money on the table by ignoring tariff switches and insulation. Don’t be one of them.
