Is It Cheaper to Run a Gas Boiler or a Heat Pump?
Is it cheaper to run a heat pump? Is it cheaper to run a gas boiler or a heat pump? For a well installed heat pump in a reasonably insulated home, the answer is usually yes, but only just. At the October 2026 Ofgem price cap rates, a heat pump at a seasonal efficiency of 3.0 costs about 8.77p per kilowatt-hour of heat, against 9.38p for a modern gas boiler at 85 percent efficiency: a saving of roughly 72 pounds a year. Change any one input and the answer can flip.
This is not a question with a fixed answer. It is a calculation with three moving parts: what you pay for each unit of energy, how efficiently each system turns that energy into heat, and how much heat your home needs. Every figure is traced to a published source, so you can check it yourself.
Is it cheaper to run a heat pump? The short answer
On the current Ofgem price cap, electricity costs 26.32p per kilowatt-hour and gas costs 7.97p. Electricity is about 3.3 times the price of gas per unit, so a heat pump must be more than 3.3 times as efficient as a gas boiler to win. Most well installed heat pumps are. At a seasonal efficiency of 3.0, a heat pump delivers three units of heat per unit of electricity, while a boiler at 85 percent delivers only 0.85 units of heat per unit of gas. Divide fuel price by efficiency and the heat pump wins by about 0.61p per kilowatt-hour of heat.
The Energy Saving Trust puts it in similar terms: heat pumps are generally around four times as efficient as a new gas boiler, running costs are around the same on standard tariffs, and a heat pump can cost less on a heat pump time of use tariff. It also says plainly that on standard tariffs heat pumps can cost slightly more than new gas or oil boilers. Both are true, because the answer sits close to break even. A 72 pound saving does not survive a bad installation, a leaky house, or a standard tariff with no off peak hours.
How the maths works: the price ratio against the efficiency ratio
Every heating comparison comes down to one question: how much does one kilowatt-hour of useful heat cost? For a gas boiler, divide the gas price by the boiler efficiency. A condensing boiler in good condition converts about 85 percent of its gas into useful heat, per the Energy Saving Trust, while an older boiler averages more like 75 percent. At the October 2026 cap rate of 7.97p per kilowatt-hour of gas, a new boiler delivers heat at 9.38p per kilowatt-hour, and an older boiler at 10.63p.
For a heat pump, the equivalent figure is the seasonal coefficient of performance, or SCOP, also called the seasonal performance factor (SPF): the average units of heat delivered per unit of electricity across a heating season. The Energy Saving Trust says heat pumps tend to run with an SPF of about 3.1. At the October 2026 cap rate of 26.32p per kilowatt-hour of electricity, a heat pump at SCOP 3.0 delivers heat at 8.77p per kilowatt-hour.
The break even point is where those two numbers are equal. Using the October 2026 cap rates and a boiler at 85 percent efficiency, the break even SCOP is 26.32 multiplied by 0.85, divided by 7.97, which is 2.81. Above 2.81 the heat pump is cheaper; below it, gas is. The electricity to gas price ratio, often called the spark gap, is 3.30. At twice the price of gas, break even would fall to about 1.70; at four times, it would rise to about 3.40. The ratio moves every quarter when Ofgem resets the price cap.
The worked example: a typical home needing 12,000 kWh of heat a year
Assumptions, stated plainly. The home needs 12,000 kilowatt-hours of useful heat a year for space heating, an illustrative figure for a typical three bedroom semi detached home. The boiler runs at 85 percent efficiency, the Energy Saving Trust figure for a typical new gas boiler. The heat pump runs at a SCOP of 3.0, close to the typical real world figure of about 3.1. Both pay the October 2026 Ofgem price cap rates for a Direct Debit customer in England, Scotland or Wales: electricity at 26.32p per kilowatt-hour, gas at 7.97p. Standing charges are added separately below, and hot water is not included.
Step one, the gas boiler. Gas used is 12,000 divided by 0.85, which is 14,118 kilowatt-hours. At 7.97p, that costs 1,125.18 pounds a year.
Step two, the heat pump. Electricity used is 12,000 divided by 3.0, which is 4,000 kilowatt-hours. At 26.32p, that costs 1,052.80 pounds a year.
Step three, the difference. Gas costs 1,125.18 pounds and the heat pump costs 1,052.80 pounds, so the heat pump is cheaper by 72.38 pounds a year, about 6 pounds a month. At a SCOP of 3.5, realistic in a well insulated home, the cost falls to 902.40 pounds, a saving of 222.78 pounds. At a SCOP of 2.5, realistic in a poorly insulated home, it rises to 1,263.36 pounds, and gas is cheaper by 138.18 pounds. At a SCOP of 4.0 the cost falls to 789.60 pounds, a saving of 335.58 pounds.
| System | Efficiency | Energy used (kWh per year) | Cost per kWh of heat | Annual fuel cost | Difference vs new gas boiler |
|---|---|---|---|---|---|
| Gas boiler, new | 85 percent | 14,118 kWh gas | 9.38p | 1,125.18 pounds | Baseline |
| Gas boiler, older | 75 percent | 16,000 kWh gas | 10.63p | 1,275.20 pounds | 150.02 pounds more than a new boiler |
| Heat pump, below average | SCOP 2.5 | 4,800 kWh electricity | 10.53p | 1,263.36 pounds | 138.18 pounds more than gas |
| Heat pump, break even | SCOP 2.81 | 4,270 kWh electricity | 9.38p | 1,125.18 pounds | Equal to gas |
| Heat pump, typical | SCOP 3.0 | 4,000 kWh electricity | 8.77p | 1,052.80 pounds | 72.38 pounds cheaper than gas |
| Heat pump, good install | SCOP 3.5 | 3,429 kWh electricity | 7.52p | 902.40 pounds | 222.78 pounds cheaper than gas |
| Heat pump, excellent | SCOP 4.0 | 3,000 kWh electricity | 6.58p | 789.60 pounds | 335.58 pounds cheaper than gas |
Three things stand out. First, the range is wide: the gap between a poor and an excellent installation is nearly 474 pounds a year on the same home. Second, break even at 2.81 sits close to the typical figure of about 3.1, which is why the two systems cost around the same on a standard tariff. Third, against a boiler at 75 percent efficiency, a heat pump at SCOP 3.0 saves 222.40 pounds a year.
Standing charges and hot water: the two items people forget
Standing charges are the fixed daily amounts on your bill. At the October 2026 cap, the gas standing charge averages 29.68p a day, or 108.33 pounds a year, and the electricity standing charge 54.83p a day, or 200.13 pounds a year. A home that heats with a heat pump and disconnects its gas supply stops paying the 108.33 pounds for gas, and the heat pump saving in the worked example grows from 72.38 pounds to about 180.71 pounds a year. Check disconnection costs and cooking arrangements first.
Hot water is the other item that is easy to miss. The worked example covers space heating only. A heat pump heats water less efficiently than rooms, because water must reach around 50 to 55 degrees, hotter than radiator water at a low flow temperature. That drags the blended efficiency below the headline figure, so the saving is a little smaller than the space heating figure suggests.
What changes the answer: the six factors that decide it
1. The electricity to gas price ratio, or spark gap
The price ratio is the largest single influence, and the one you control least. In July 2026 the ratio was 3.56 and break even SCOP was about 3.03. By October 2026 the ratio had fallen to 3.30, so heat pumps became slightly more competitive, because gas got more expensive relative to electricity. The October figures include the temporary removal of VAT from domestic electricity in Great Britain from 1 October 2026 to 31 March 2027, while gas still carries 5 percent VAT. If that cut ends as scheduled, the electricity price will rise and break even with it. The government has talked for years about rebalancing prices; the Energy Saving Trust notes that if that happens, heat pumps should quickly become the cheapest way to heat a home.
2. SCOP and flow temperature
SCOP is not a fixed property of a heat pump. It depends on the design, the installation, and above all the flow temperature, the temperature of the water in the radiators or underfloor heating. At 35 to 40 degrees, which suits underfloor heating or oversized radiators, a well designed system can reach a SCOP of 3.5 or higher. At 55 to 65 degrees, which small radiators designed for a gas boiler often need, the SCOP can fall to 2.5 or below, and the heat pump loses to gas. Gas boilers typically send water around at 70 to 80 degrees, so radiators in a gas heated home are sized for hot water. A heat pump at 45 degrees through those radiators will not deliver enough heat on a cold day, so the installer must fit larger radiators, fit underfloor heating, or run the pump hotter and accept a lower SCOP. The first two cost money upfront but protect the running cost. Any quote that does not mention radiators or flow temperature has not done the heat loss calculation properly.
3. Insulation and heat loss
A heat pump does not make a draughty home cheap to heat. It makes a well insulated home cheap to heat. It delivers heat steadily at a low temperature, which suits a home that loses heat slowly. A draughty home loses heat quickly, so the pump must work harder, run hotter, and use more electricity. Insulation cuts the bill for either system, but it helps the heat pump disproportionately, because it lets the pump run at a lower flow temperature and a higher SCOP. Loft insulation, cavity wall insulation and draught proofing are usually cheaper than a heat pump, and they reduce the size of heat pump you need. If your home has no loft insulation, spend the heat pump budget on insulation first.
4. Heat pump tariffs
The tariff you choose can matter as much as the efficiency of the machine. The Energy Saving Trust’s latest research found that most heat pumps on a standard flat rate cost the same or more than an efficient gas boiler, but those on a dedicated heat pump tariff had significantly better running costs, with switching saving up to 330 pounds a year. The best known example is Octopus Cosy, about 51 percent below the regional day rate in three off peak windows, 04:00 to 07:00, 13:00 to 16:00, and 22:00 to midnight, and about 50 percent above the day rate from 16:00 to 19:00. Exact rates vary by region, and other suppliers offer similar tariffs. The catch is the peak: the tariff only saves money if heating can avoid it, which needs a well insulated home and controls that schedule heating around the cheap windows.
5. Servicing costs
Both systems need regular servicing, and the costs are similar enough that they rarely decide the comparison. The Energy Saving Trust says a heat pump should be serviced once a year, typically costing around 150 pounds for an air source heat pump. A gas boiler also needs an annual service, so get local quotes for both. What matters more is lifespan and repair risk: a heat pump has no combustion, but its compressor and electronics are expensive to replace outside warranty. Ask how long the warranty lasts.
6. Boiler age and efficiency
This factor is often overlooked, and it is one of the largest. At 75 percent efficiency, the figure the Energy Saving Trust uses for an older boiler due for replacement, the gas cost in the worked example rises from 1,125.18 pounds to 1,275.20 pounds a year. Against that boiler, a heat pump at SCOP 3.0 saves 222.40 pounds a year on fuel alone. If your boiler is old and unreliable, the choice is between replacing a worn out machine with a new one, or with a different kind of machine altogether. A condensing boiler only achieves its quoted efficiency when the returning water is cool enough for flue gases to condense.
Install cost and grants in brief
Running costs are the question, but the upfront cost decides whether the saving is worth chasing. The Energy Saving Trust puts a typical air source heat pump installation at around 12,000 pounds. The Boiler Upgrade Scheme, in England and Wales and administered by Ofgem, pays 7,500 pounds towards an air source or ground source heat pump, or 2,500 pounds towards an air to air heat pump, deducted from the quote by the installer. That brings a typical installation to around 4,500 pounds out of pocket before radiator upgrades. Until March 2027, homes with no mains gas connection heated by oil or LPG can get an additional 1,500 pounds, taking the grant to 9,000 pounds, per GOV.UK. Hybrid systems that keep a gas boiler are not covered.
Two deadlines fall on 31 March 2027. The 0 percent VAT rate on installing energy saving materials, including heat pumps, is due to end that day, returning to 5 percent, per HMRC’s VAT Notice 708/6. The 9,000 pound Boiler Upgrade Scheme uplift for off gas oil and LPG homes also ends then. The standard 7,500 pound grant continues, the scheme having been extended until 2030, but the 2027 to 2028 budget was held at 400 million pounds rather than rising to 600 million. At 72.38 pounds a year saved, a 4,500 pound net install takes over sixty years to pay back from fuel savings alone. At around 405 pounds a year on a good heat pump tariff, with the gas standing charge saved, payback falls to roughly a decade. If your boiler is old and would need replacing anyway, compare the extra cost of the heat pump over a new boiler, not the full cost.
Gas boiler vs air source heat pump: the comparison
| Gas boiler | Air source heat pump | |
|---|---|---|
| Fuel price per kWh (October 2026 cap) | 7.97p per kWh of gas | 26.32p per kWh of electricity |
| Efficiency | About 85 percent for a new boiler, about 75 percent for an older boiler | SCOP about 3.0 typically, up to 4.0 for a good installation |
| Cost per kWh of useful heat | 9.38p at 85 percent, 10.63p at 75 percent | 8.77p at SCOP 3.0, 7.52p at SCOP 3.5, 10.53p at SCOP 2.5 |
| Typical annual running cost, worked example (12,000 kWh of heat, fuel only) | 1,125.18 pounds at 85 percent, 1,275.20 pounds at 75 percent | 1,052.80 pounds at SCOP 3.0, 902.40 pounds at SCOP 3.5, 1,263.36 pounds at SCOP 2.5 |
| Standing charges | Gas standing charge about 108.33 pounds a year at the cap average | No gas standing charge if the gas supply is disconnected, about 108.33 pounds a year saved |
| Tariff effect | Gas tariffs vary little | Large effect, a heat pump tariff can save up to about 330 pounds a year, per the Energy Saving Trust |
| Servicing | Annual service, get a local quote before comparing | Annual service, typically around 150 pounds, per the Energy Saving Trust |
| Typical install cost before grant | A new boiler is much cheaper than a heat pump, get a local quote | Typically around 12,000 pounds, per the Energy Saving Trust |
| Grant | No grant for a replacement gas boiler | 7,500 pounds, or 9,000 pounds for eligible off gas oil and LPG homes until 31 March 2027 |
| VAT on installation | Standard rate, 20 percent | 0 percent until 31 March 2027, then 5 percent |
When a heat pump is NOT cheaper
Honesty requires saying plainly when the heat pump loses. First, a poorly insulated home: the pump must run hot for long hours, its SCOP falls, and the electricity bill rises. Insulation is the fix, not a bigger heat pump. Second, high temperature radiators with no upgrades: small radiators sized for a boiler at 70 to 80 degrees force the pump to a SCOP of 2.5 or below, and gas wins. Third, an expensive standard electricity tariff: with no off peak hours the saving is small at best. If you cannot switch to a heat pump tariff, the case weakens considerably. Fourth, very low gas use: in a small, well insulated flat, 6 percent of a small bill may not justify the upfront cost.
How to make sure a heat pump is cheaper in your home
Before you accept a quote, get a proper heat loss survey from an MCS certified installer and ask to see the calculated heat demand. Ask what flow temperature the system is designed for, and what SCOP the installer expects across a season, in writing. Ask whether radiators need upgrading, and check MCS certification, which the grant requires. Compare heat pump tariffs and get a boiler quote too. After installation, run the pump steadily at a low temperature, keep radiators clear, service it annually, and check your tariff each year when the cap changes.
Frequently asked questions
Is it cheaper to run a gas boiler or a heat pump?
Is it cheaper to run a heat pump? Usually yes, but only just on a standard tariff. At the October 2026 cap rates, a heat pump at SCOP 3.0 costs about 8.77p per kilowatt-hour of heat, against 9.38p for a new gas boiler at 85 percent efficiency: a saving of about 72 pounds a year on a home needing 12,000 kilowatt-hours of heat. The saving is larger on a heat pump tariff, and about 222 pounds a year against an old boiler at 75 percent efficiency. A poorly installed heat pump in a badly insulated home can cost more than gas.
What SCOP does a heat pump need to beat a gas boiler?
At the October 2026 cap rates, electricity at 26.32p and gas at 7.97p per kilowatt-hour, with a boiler at 85 percent efficiency, the break even SCOP is 2.81. Above 2.81 the heat pump is cheaper; below it, gas is. The Energy Saving Trust says heat pumps tend to run with an SPF of about 3.1, and a good installation can exceed 4.
How much does a heat pump cost to run per year in the UK?
It depends on heat demand, efficiency and tariff. In the worked example, a home needing 12,000 kilowatt-hours of heat a year pays 1,052.80 pounds a year for a heat pump at SCOP 3.0 on the October 2026 cap, against 1,125.18 pounds for a new gas boiler. At SCOP 3.5 it would cost 902.40 pounds, and at SCOP 2.5 it would cost 1,263.36 pounds.
Does a heat pump tariff really make a difference?
Yes, it can be the biggest single factor after the installation itself. The Energy Saving Trust found most heat pumps on a standard flat rate cost the same or more than an efficient gas boiler, but those on a dedicated heat pump tariff had significantly better running costs, with switching saving up to 330 pounds a year. Tariffs such as Octopus Cosy charge about 51 percent below the day rate in three off peak windows, but more at the evening peak.
Is a heat pump cheaper to run than an old gas boiler?
Yes, in most cases, and by a wider margin than against a new boiler. An older boiler at 75 percent efficiency costs about 10.63p per kilowatt-hour of heat at the October 2026 cap rates, against 8.77p for a heat pump at SCOP 3.0: 1,275.20 pounds against 1,052.80 pounds a year on a home needing 12,000 kilowatt-hours, a saving of 222.40 pounds before any tariff or standing charge saving.
Will a heat pump still be cheaper if electricity prices rise?
It depends on whether gas prices rise too. What matters is the ratio between the two prices, not the absolute level of either. If both rise by the same proportion, break even does not change. A higher SCOP gives a margin above break even, and a heat pump tariff cuts the price you pay below the cap rate. The temporary removal of VAT from domestic electricity until 31 March 2027 also helps at present.
Related reading
- October 2026 energy price cap: what it means for your bills
- Boiler Upgrade Scheme: the 9,000 pound heat pump grant explained
- When does 0% VAT on heat pumps end?
Sources
- Ofgem, Energy price cap unit rates and standing charges, 1 October to 31 December 2026. https://www.ofgem.gov.uk/your-energy-supply/your-energy-bill/energy-price-cap-unit-rates-and-standing-charges
- Ofgem, Energy price cap and standing charges explained. https://www.ofgem.gov.uk/information-consumers/energy-advice-households/check-if-energy-price-cap-affects-you
- GOV.UK, Apply for the Boiler Upgrade Scheme. https://www.gov.uk/apply-boiler-upgrade-scheme
- Energy Saving Trust, Air source heat pumps: costs, savings and benefits. https://energysavingtrust.org.uk/advice/air-source-heat-pumps
- Energy Saving Trust, Heat pump fact check. https://energysavingtrust.org.uk/heat-pump-fact-check/
- Energy Saving Trust, Your heat pump questions answered. https://energysavingtrust.org.uk/heat-pump-questions-answered
- Energy Saving Trust, How to make renewable technology more affordable. https://energysavingtrust.org.uk/renewable-technologies-what-really-cuts-energy-bills/
- HMRC, VAT Notice 708/6: energy saving materials and heating equipment. https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086
- Octopus Cosy tariff structure, as reported in October and November 2026 tariff comparisons. https://www.retrofitplanner.co.uk/guides/best-heat-pump-tariffs/
