Will heat pump grants be cut? Reports published on 12 October 2026 say ministers are preparing to cut funding for the Boiler Upgrade Scheme, the £2.7 billion grant programme that pays £7,500 towards a heat pump, in order to help fund higher defence spending. Nothing has been confirmed. The Department for Energy Security and Net Zero says it will set out its plans this autumn, and the Chancellor’s Budget on 28 October is the date to watch. Here is what is actually reported, what is still rumour, and what to do if you are planning a heat pump.

Timing matters here. Two valuable savings are already guaranteed to end on 31 March 2027 whether or not the Budget touches the scheme: the £9,000 grant for oil and LPG heated homes drops back to £7,500, and 0% VAT on heat pump installations reverts to 5%. Any Budget cut would come on top of those. So this is the worst possible moment to sit on the fence if you were already considering a heat pump.

Will heat pump grants be cut? What the reports actually say

On 12 October 2026, The Guardian’s policy editor reported that ministers are preparing to slash the amount of money available to subsidise heat pumps, with sources saying some of the cuts are needed to fund a higher defence bill. The report says the Energy Secretary has been asked to find more than £2 billion in savings from the energy department’s budget, and that the Boiler Upgrade Scheme would provide part of them.

Follow-up coverage, including the i Paper and the specialist press, added detail but changed nothing fundamental. The scheme is not expected to be scrapped outright. Instead, reports talk about a cut of hundreds of millions of pounds from its £2.7 billion budget. The i Paper reported that the Treasury favours keeping the scheme open but with smaller grants. In practice, a budget squeeze on a grant scheme usually ends one of two ways: the grants get smaller, or the money runs out sooner.

That is the honest summary of where things stand: a well-sourced report of intent, plus informed speculation about the shape. Nothing else. Treat anyone who tells you the grant is already gone, or that nothing will change, with equal suspicion.

What has not changed: the grants you can claim today

For all the noise, the rules of the Boiler Upgrade Scheme are exactly what they were a week ago. Households in England and Wales can still get:

• £7,500 towards an air source or ground source heat pump, the standard grant.
• £9,000 if your home is off the gas grid and you are replacing oil or LPG heating, an uplift that has run since 21 July 2026 and stays until 31 March 2027.
• A smaller grant for air-to-air heat pumps, a newer category added to the scheme in April 2026.

The scheme has subsidised nearly 80,000 heat pumps since it began in 2022, and it was still growing fast before the reports landed: July 2026 saw a record 8,150 applications. The EPC requirement was removed in April 2026, which took one of the biggest eligibility barriers out of the way. All of that is live, today, and none of it changes until the government announces a change.

What the government has actually said

The Department for Energy Security and Net Zero has confirmed nothing about a cut. Its statement to The Telegraph reads: “Savings for the Defence Investment Plan are a small part of DESNZ’s overall budget, which saw a significant uplift at the Spending Review. We will set out how we will fund essential investment in our national security this autumn.”

That is a neither-confirm-nor-deny. The Chancellor delivers the Autumn Budget on 28 October 2026, and that is the most likely moment for any change to be announced. Between now and then, expect more briefing, more industry warnings, and no clarity.

Why the industry is alarmed

The retrofit industry has reacted strongly, and its argument is worth understanding even if you never plan to lobby an MP. Greg Jackson, founder and chief executive of Octopus Energy, called the mooted cuts “remarkably short-sighted”, pointing out that Britain’s exposure to gas cost the Treasury £80 billion in the last energy crisis, while the Boiler Upgrade Scheme budget is just 0.5% of that. He added that cutting the scheme would put thousands of skilled jobs at risk.

Anna Moore, chief executive of retrofit consultancy Domna, said cutting the funding would be “a severe blow to households already facing another expensive winter”. Supporters of the scheme also point to the domestic heat pump industry itself, which they describe as expanding by more than 25% a year on the back of the grant demand, and argue that cutting the subsidy now would strand that investment just as the market is scaling.

The Treasury’s counter-argument, per the reporting, is that the subsidy is relatively generous and has skewed towards better-off households. Neither claim needs you to pick a side. What matters for your household is narrower: what happens to your grant if you act now versus later.

If you apply now, is your grant safe?

This is the most useful question in the whole story, and the answer comes from how the scheme works rather than how ministers talk about it. Your installer applies to Ofgem for a voucher, and once that voucher is issued it is reserved for your installation while it stays valid, which is three months for an air source heat pump.

There is precedent for how changes treat issued vouchers. When the scheme’s rules changed in July 2026, vouchers already issued kept the value they were issued at. A voucher in hand puts you in a far stronger position than waiting on the sidelines, because any future change would most plausibly affect new applications, not grants already committed.

That does not make an issued voucher a legal guarantee against every scenario. But it is the best protection available, and getting a quote, booking your survey and having the voucher application ready costs you nothing in lost grant if you later decide not to proceed.

The March 2027 deadline matters more than the Budget

It is easy to obsess over 28 October and miss the deadline that is already locked in. Two confirmed savings end on 31 March 2027, regardless of what the Chancellor announces:

• The £9,000 oil and LPG grant drops back to £7,500 after March. If you heat with oil or LPG, waiting costs you £1,500 of grant alone.
• 0% VAT on heat pump installations ends and reverts to 5%. On a typical installation that is several hundred pounds more, before any grant change.

Together, an oil-heated household that waits until after March could pay roughly £2,000 more for the same system than one that acts now, even if the Budget changes nothing at all. That figure assumes a typical installation and the grant and VAT changes above; it is arithmetic, not a prediction.

What to do this week: a practical plan

Do not wait for certainty that will not arrive until Budget day. Here is the order that protects you best:

• Get a survey booked now. A good installation needs a home survey and a room-by-room heat loss design before anything is ordered. That process takes several weeks, and installers expect a rush as March approaches.
• Get a fixed quote with the grant itemised. Ask the installer to show the £7,500 or £9,000 grant separately so you can see exactly what you would lose if the grant shrank.
• Ask the installer about the voucher timeline. They apply to Ofgem on your behalf. Confirm when the application goes in and how long the voucher stays valid for your system type.
• If you heat with oil or LPG, treat March 2027 as the real deadline. The extra £1,500 uplift is confirmed to end then, Budget or no Budget.
• Watch the Budget on 28 October. That is when any cut is most likely to be announced. We will update this article once the details are published.

One more point for heat pump owners rather than buyers: if your bills look high after switching, the cause is almost always how the system is run, not the hardware. Our guide to the most economical way to run an air source heat pump walks through flow temperatures, set-back settings and the mistakes that push bills up, and why your bill might be high with a heat pump covers the nine causes we see most often. If you are still deciding whether to leave a new system running overnight, our set-back guide explains why constant running usually wins.

Frequently asked questions

Will heat pump grants be cut?

Reports published on 12 October 2026 say ministers plan to cut funding for the Boiler Upgrade Scheme to help pay for defence, most likely by reducing the £2.7 billion budget rather than closing the scheme. The government has confirmed nothing, and the Chancellor’s Budget on 28 October 2026 is the most likely moment for an announcement.

Is the Boiler Upgrade Scheme still open?

Yes. Households in England and Wales can still claim £7,500 towards an air source or ground source heat pump, or £9,000 if they are off the gas grid and replacing oil or LPG heating. The scheme is unchanged until the government announces a change.

What is the Boiler Upgrade Scheme budget?

The scheme has a budget of £2.7 billion and has subsidised nearly 80,000 heat pumps since 2022. Reports say hundreds of millions of pounds could be cut from that budget at the Autumn Budget.

If I apply before the Budget, will my grant be safe?

Once Ofgem issues a voucher to your installer, it is reserved for your installation while valid (three months for an air source heat pump). When the rules changed in July 2026, already-issued vouchers kept their issued value, so applying early puts you in a stronger position than waiting.

When does the £9,000 heat pump grant end?

The £9,000 uplift for off-gas-grid oil and LPG homes ends on 31 March 2027, when it drops back to £7,500. This is already confirmed and is separate from any Budget decision.

When does 0% VAT on heat pumps end?

Heat pump installations are currently VAT-free. From 1 April 2027, VAT returns to 5%. Like the £9,000 grant end date, this is confirmed and does not depend on the Budget.

Sources

• The Guardian, 12 Oct 2026: ministers preparing to slash heat pump subsidies to fund defence spending (via Inside Housing coverage, 13 Oct 2026, and Property118, 16 Oct 2026)
• UKEM Group, 14 Oct 2026: what the reports mean, current grant levels, voucher mechanics and the 28 October Budget date
• PBT Installations, 13 Oct 2026: the 31 March 2027 grant and VAT deadlines, and the cost of waiting for an oil or LPG home