Air Source Heat Pump Costs, Grants and Savings in the UK
An air source heat pump extracts heat from outside air to warm your home and hot water, typically replacing a gas, oil or LPG boiler. Here’s what UK homeowners typically pay, what grants are available, and what it saves on running costs.
Typical installed cost by home size
| Home size | Typical unit | Installed cost before grant |
|---|---|---|
| 1 to 2 bed | 5 to 7kW | £7,000 to £10,000 |
| 3 bed semi | 8 to 10kW | £10,000 to £13,500 |
| 4+ bed | 10 to 16kW | £13,000 to £18,000 |
Government grant: the Boiler Upgrade Scheme
The Boiler Upgrade Scheme gives £7,500 off an air source heat pump replacing a gas boiler, rising to £9,000 for homes currently on oil or LPG heating (from July 2026). Combined with the 0% VAT rate on heat pump installations, a typical three-bedroom installation cost of £10,000 to £13,500 can fall to roughly £2,500 to £6,000 net. Government data on actual Boiler Upgrade Scheme installations puts the average air source heat pump (an 8kW unit) at £12,500 before the grant.
Running cost savings vs gas
Running costs are typically 30 to 70% lower than a gas boiler in a property with reasonable insulation, working out to roughly £540 to £1,000 a year depending on the system and how well-insulated the home is. That figure also reflects no longer paying for an annual gas boiler service, typically around £120 a year.
Payback period
Because the grant covers most of the up-front cost, payback from running-cost savings alone can be as fast as 2 to 4 years for homes that qualify for the full grant and see the higher end of the running-cost saving. Homes with poor insulation or that don’t qualify for the full grant will see a longer payback.
These figures are UK-wide averages for illustration, not a quote or guarantee of eligibility. Your actual cost, grant amount and savings depend on your current heating system, home insulation, location and the installer you choose. Get matched with vetted installers for a quote based on your own home.