At Q2 2026 Ofgem price cap rates, gas costs 5.74p/kWh and electricity costs 24.67p/kWh. That makes electricity 4.3 times more expensive per unit. But heat pumps are roughly 3-3.5 times more efficient than gas boilers, producing 3-3.5kWh of heat for every 1kWh of electricity consumed. The effective cost of heat from a heat pump is approximately 7-8p/kWh, compared to 6.2-6.5p/kWh for gas after accounting for boiler losses. Running costs are near parity in 2026. Factor in the £7,500 BUS grant, and a heat pump can cost less upfront than a new gas boiler.
Running Cost Comparison Table
| Gas Boiler | Air Source Heat Pump | |
|---|---|---|
| Fuel unit cost (Q2 2026) | 5.74p/kWh | 24.67p/kWh (electricity) |
| Efficiency | 90-92% | 300-350% (COP 3.0-3.5) |
| Effective cost per kWh of heat | 6.2-6.4p | 7.0-8.2p |
| Annual heating cost (3-bed semi) | £780-£900 | £840-£1,100 |
| Annual hot water cost | £120-£180 | £150-£250 |
| Annual maintenance | £80-£120 | £100-£200 |
| Total annual cost | £980-£1,200 | £1,090-£1,550 |
| Installation cost | £2,000-£4,000 | £8,000-£14,000 |
| Installation cost after BUS grant | N/A | £500-£6,500 |
| Lifespan | 12-15 years | 20-25 years |
Sources: Ofgem Q2 2026 price cap, Energy Saving Trust, MCS
Based on 14,000 kWh annual heating demand for a typical 3-bedroom semi-detached home.
How Can Heat Pumps Compete When Electricity Is 4x More Expensive?
The answer is efficiency: a heat pump delivers 3-3.5 units of heat for every 1 unit of electricity, while a gas boiler converts less than 1 unit of gas into less than 1 unit of heat. This is because heat pumps do not generate heat — they move it from outdoor air into your home using a refrigerant cycle.
Here is the maths for a typical 3-bedroom semi needing 14,000kWh of heating per year:
Gas boiler (92% efficiency):
- Gas needed: 14,000 / 0.92 = 15,217 kWh
- Cost: 15,217 x 5.74p = £873/year
Heat pump (COP 3.2):
- Electricity needed: 14,000 / 3.2 = 4,375 kWh
- Cost: 4,375 x 24.67p = £1,079/year
At standard tariff rates, a gas boiler is roughly £100-£300 cheaper per year to run. But the gap is closing, and several factors tip the balance in the heat pump’s favour.
When Does a Heat Pump Beat a Gas Boiler on Running Costs?
On an off-peak electricity tariff, a heat pump already costs less to run than a gas boiler. Time-of-use tariffs such as Octopus Cosy (around 14p/kWh overnight) slash heat pump running costs:
| Scenario | Annual heating cost |
|---|---|
| Gas boiler (standard tariff) | £873 |
| Heat pump (standard tariff, COP 3.2) | £1,079 |
| Heat pump (off-peak tariff 14p/kWh, COP 3.2) | £613 |
| Heat pump + solar panels | £400-£600 |
Heat pumps are particularly well-suited to off-peak tariffs because most heating demand occurs overnight and in the early morning. A hot water cylinder acts as a thermal store, heating water cheaply overnight for use throughout the day.
Pair a heat pump with a 4kW solar panel system and battery storage, and you could reduce annual heating costs to under £400 — a saving of over £400 compared to gas.
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What About Upfront Costs?
After the BUS grant, a heat pump can cost less to install than a new gas boiler. This is the most overlooked comparison point.
| Gas Boiler | Heat Pump | |
|---|---|---|
| Equipment + installation | £2,000-£4,000 | £8,000-£14,000 |
| BUS grant | None available | -£7,500 |
| You pay | £2,000-£4,000 | £500-£6,500 |
A straightforward heat pump installation at £8,000-£10,000, minus the £7,500 grant, leaves a homeowner paying £500-£2,500 — potentially cheaper than a new gas boiler. The grant is applied at source by your MCS-certified installer, so you never have to find the full amount upfront (GOV.UK).
From 21 July 2026, homes using oil or LPG heating can receive an increased grant of £9,000 (Ofgem).
What Is the Total Cost Over 20 Years?
Over a 20-year period, a heat pump saves approximately £3,900 compared to gas, according to Energy Saving Trust running cost projections. The heat pump’s longer lifespan (20-25 years vs 12-15 for a gas boiler) means you avoid at least one boiler replacement cycle.
| Gas Boiler (20 years) | Heat Pump (20 years) | |
|---|---|---|
| Installation (inc. 1 boiler replacement) | £4,000-£8,000 | £500-£6,500 (after grant) |
| Running costs | £17,500-£24,000 | £17,000-£22,000 |
| Maintenance | £1,600-£2,400 | £2,000-£4,000 |
| 20-year total | £23,100-£34,400 | £19,500-£32,500 |
These figures use current energy prices. If gas prices rise faster than electricity (the long-term trend), the heat pump advantage increases. The Government’s electrification agenda and expansion of offshore wind are expected to drive electricity prices down relative to gas over the next decade.
What About the Gas Boiler Ban?
There is no outright ban on gas boilers for existing homes. The previous plan to ban new gas boiler sales by 2035 has been scrapped. However, under the Future Homes Standard, new-build homes will need to meet efficiency levels that effectively require low-carbon heating systems like heat pumps. Gas boilers will not meet the standard for new homes (GOV.UK).
For existing homeowners, the direction of travel is clear: Government incentives (BUS grant, planning relaxations) are pushing toward heat pumps, while no equivalent subsidies exist for gas boiler replacements. Installing a heat pump now locks in the grant and positions your home for future regulations.
Learn more about how heat pumps work and which type suits your property in our heat pumps guide.
FAQ
Are heat pumps cheaper to run than gas boilers in 2026?
At standard Ofgem tariff rates, a gas boiler is roughly £100-£300/year cheaper to run than a heat pump. On an off-peak electricity tariff (around 14p/kWh), a heat pump is £200-£400/year cheaper. With solar panels, a heat pump wins decisively. The gap at standard rates has narrowed significantly and is expected to shift in the heat pump’s favour as electricity prices fall relative to gas.
How much does it cost to replace a gas boiler with a heat pump?
A heat pump installation costs £8,000-£14,000 before the £7,500 BUS grant. After the grant, most homeowners pay £500-£6,500. A new gas boiler costs £2,000-£4,000 with no grant available. For straightforward installations, a heat pump after the grant can be cheaper than a new boiler.
Will gas boilers be banned in 2035?
No. The UK Government scrapped the planned 2035 ban on new gas boiler sales. However, new-build homes will need to meet stricter efficiency standards under the Future Homes Standard, which effectively requires heat pumps or similar low-carbon systems. Existing homeowners can continue to repair and replace gas boilers, but incentives are shifting toward heat pumps.
Can I keep my radiators if I switch from a gas boiler to a heat pump?
In many cases, yes. High-temperature heat pumps (65-80C flow temperature) work with existing radiators. Standard heat pumps (35-55C) may require larger radiators or supplementary underfloor heating. An MCS-certified installer will assess your radiators during the heat loss survey and advise on any upgrades needed.
Is it worth waiting for energy prices to change?
No. The BUS grant is confirmed to 2028, but funding is allocated on a first-come, first-served basis. Energy price trends are uncertain, but the heat pump’s efficiency advantage means it benefits from any drop in electricity prices. Installing now locks in the grant and starts the savings clock immediately.
Find out what you would save by switching from gas to a heat pump.
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