Last reviewed 8 September 2026. Running costs use the Ofgem price cap for 1 October to 31 December 2026: electricity 26.32p per kWh, gas 7.97p per kWh.
At the October 2026 price cap, electricity costs about 3.3 times as much as gas per unit. A gas boiler is roughly 90% efficient, so it turns 7.97p of gas into about 8.9p of heat per kWh. A heat pump that reaches a seasonal efficiency (SCOP) above about 3.0 already beats that gas boiler on running cost, before any special heat pump tariff. Most modern air source heat pumps run at SCOP 3.2 to 4.0, so for a well-insulated home the heat pump is now the cheaper one to run. Earlier in 2026, on the old cap rates, it was closer to line-ball.
How the October 2026 cap changes the maths
Two numbers settle this: the price of each fuel, and how efficiently your system turns it into heat.
The current Ofgem cap, which runs from 1 October to 31 December 2026, puts electricity at 26.32p per kWh and gas at 7.97p per kWh. That is a ratio of about 3.3 to 1. A condensing gas boiler runs at roughly 90% efficiency once it has a few years on it, so the real cost of a kWh of heat from gas is 7.97p divided by 0.90, which comes to about 8.9p.
A heat pump’s efficiency is its SCOP, the seasonal average of heat produced for each unit of electricity drawn. Divide the electricity price by the SCOP and you get the cost of a kWh of heat:
| Heat pump SCOP | Effective cost per kWh of heat | Against a gas boiler at 8.9p |
|---|---|---|
| 2.5 | 10.5p | dearer |
| 3.0 | 8.8p | about level |
| 3.2 | 8.2p | cheaper |
| 3.5 | 7.5p | cheaper |
| 4.0 | 6.6p | cheaper |
The break-even point sits at a SCOP of about 3.0. Below it a gas boiler is cheaper to run. Above it the heat pump pulls ahead. A properly sized and commissioned air source heat pump in a reasonably insulated home sits comfortably on the right side of that line.
Annual running costs compared
The table below is for a well-insulated three-bed semi with a space heating demand of about 12,000 kWh a year, priced at the October 2026 cap. Hot water and servicing are added on the same basis.
| Factor | Gas boiler | Air source heat pump |
|---|---|---|
| Fuel price per kWh (Oct 2026 cap) | 7.97p gas | 26.32p electricity |
| System efficiency | 90% to 93% | SCOP 3.0 to 4.0 |
| Effective cost per kWh of heat | 8.6p to 8.9p | 6.6p to 8.8p |
| Annual space heating (12,000 kWh) | £1,030 to £1,065 | £790 to £1,055 |
| Annual hot water | £200 to £225 | £230 to £270 |
| Annual service | £80 to £120 | £150 to £250 |
| Total per year | £1,310 to £1,410 | £1,170 to £1,575 |
On space heating alone, the largest single item, the heat pump usually wins at the current cap. Once you add a slightly dearer hot water figure and a heat pump service that tends to cost more than a boiler service, the totals move closer together. A dedicated heat pump tariff is what turns a narrow win into a clear one, which is covered further down.
One saving sits outside the table. If a heat pump lets you drop the gas connection completely, you also lose the gas standing charge, which is 29.68p a day, or about £108 a year at the current cap. Keep gas for a hob or a back-up and that saving goes away.
These figures assume a heat pump that has been sized and set up well. A unit that is oversized, run too hot, or fitted to undersized radiators can slip below SCOP 3.0 and cost more than the gas boiler it replaced. The running cost advantage is real, and it rests on the quality of the install rather than the badge on the box.
What the £7,500 grant does to the upfront cost
Running cost is only half the decision. The gap in fitting price between a heat pump and a like-for-like boiler is closed a long way by the Boiler Upgrade Scheme. In England and Wales the grant is £7,500 towards an air source or ground source heat pump. From 21 July 2026 to 31 March 2027 it rises to £9,000 for off-gas-grid homes that currently run on heating oil or LPG. An air-to-air heat pump draws a smaller £2,500, and a biomass boiler £5,000.
The grant is paid to your installer and comes off the quote, so a typical air source install that lists at around £12,000 to £14,000 lands nearer £4,500 to £6,500 after the £7,500 has been applied.
Heat pump tariffs push the gap wider
The figures above use the standard cap unit rate of 26.32p. Several suppliers now sell tariffs aimed at heat pump owners with cheaper off-peak windows. Octopus Cosy, for one, gives eight cheaper hours a day, from 4am to 7am, 1pm to 4pm and 10pm to midnight, alongside a dearer late-afternoon peak from 4pm to 7pm. Off-peak rates on these tariffs usually sit well below the cap rate, so moving most of your heating and hot water into the cheap hours lowers the electricity price you actually pay, and the running cost with it. These rates change with wholesale prices and vary by region, so check the current numbers with the supplier before switching.
Choose a heat pump if
- You are replacing an oil, LPG, or direct-electric system, where the savings are largest.
- You can claim the £7,500 grant, or the £9,000 uplift if you are off the gas grid on oil or LPG.
- You plan to stay in the home for ten years or more.
- You can move onto a dedicated heat pump electricity tariff.
- Your home is reasonably insulated, or you are willing to improve it.
Stick with gas if
- Your home is poorly insulated at EPC D or E and you cannot improve it soon.
- You expect to move within about five years.
- Your current boiler is only a few years old and working well.
- You have very limited outdoor space for a unit.
- The upfront budget is tight even after the grant.
Frequently asked questions
What SCOP do I need for a heat pump to beat gas?
At the October 2026 cap, about 3.0. Electricity is 26.32p per kWh and a 90% gas boiler delivers heat at about 8.9p per kWh, so a heat pump needs to produce roughly 3 units of heat per unit of electricity to match it. Anything above SCOP 3.0 is cheaper to run than the gas boiler. Well-installed air source units generally return 3.2 to 4.0.
Can I keep my gas boiler and add a heat pump?
Yes, that is a hybrid system, where the heat pump does most of the work and the boiler steps in during cold snaps. It can be a sensible stepping stone if your home is not yet well insulated. Bear in mind that the Boiler Upgrade Scheme funds full air source and ground source heat pumps at £7,500, and hybrid setups are not a listed category, so check eligibility with an installer before you count on a grant.
Will a heat pump reduce my energy bills?
It depends what you are replacing. Swapping a gas boiler for a well-run heat pump at the current cap gives a modest running-cost saving on space heating, and a larger one if you move onto a heat pump tariff. Replacing oil, LPG, or direct electric heating brings bigger savings of 20% to 50%. Pairing a heat pump with solar panels and a battery stretches the saving further.
Are heat pumps noisy?
Modern air source units produce around 42 to 58 dB, similar to a fridge or a quiet conversation. Fitted with anti-vibration mounts and sited sensibly, they should not disturb you or your neighbours.
Other Look Into energy guides
- UK Heating Cost Index 2026, the full heat pump against gas boiler running-cost breakdown.
- What everything in your home costs to run, priced at the current cap.
- Best air source heat pumps in the UK 2026, the models compared.
- Heat pumps vs solar panels, which to install first.
- Our complete heat pump guide for installation, sizing and grants.
Sources
- Ofgem, energy price cap unit rates and standing charges, 1 October to 31 December 2026
- Energy Saving Trust, Boiler Upgrade Scheme
- Energy Stats UK, Octopus Cosy tariff times and rates
Prices and grant terms were checked on 8 September 2026 and can change. Check the current figures with Ofgem, the Energy Saving Trust and your supplier before making a decision.