Heat Pump Subsidy Cut: What Homeowners Should Know

A heat pump subsidy cut is on the table, according to a Guardian exclusive published on 12 October 2026. It reports that ministers are preparing to reduce the money available for heat pump subsidies to help pay for higher defence spending. Nothing has been confirmed, but if you are thinking about a heat pump, here is what is known and how to plan around it.

The story, by the Guardian’s policy editor, cites sources saying that part of the more than £2bn of savings the energy secretary has been asked to find will come from the Boiler Upgrade Scheme. It says the scheme would not be abolished, but that hundreds of millions of pounds would be cut from its £2.7bn budget. You can read the original on The Guardian.

The Department for Energy Security and Net Zero responded in the article. A spokesperson said savings for the defence investment plan are a small part of its overall budget, and that it will set out how it will fund national security investment this autumn. As quoted, the statement does not mention the scheme directly, so no cut has been officially confirmed.

What would a heat pump subsidy cut actually affect?

The support in question is the Boiler Upgrade Scheme, which helps with the upfront cost of a heat pump in England and Wales. According to Ofgem’s scheme page, the current grants are £7,500 off air-to-water, ground source and water source heat pumps, and £2,500 off air-to-air heat pumps for residential properties. Eligible off-gas-grid homes can get £9,000 off air-to-water or ground source heat pumps until 31 March 2027. The Guardian says the scheme has subsidised nearly 80,000 heat pumps since it began in 2022.

We have already covered the higher grant for oil and LPG homes in our guide to the £9,000 heat pump grant, and you can find the basics on our Boiler Upgrade Scheme page. What matters now is that any reduction would change funding, and we do not yet know how, when or for whom. Anything you already have in progress is a separate question for your installer.

How does the grant reach you?

The scheme does not work as a cheque to the homeowner. Ofgem explains that you apply through an MCS-certified installer, who applies for and redeems the voucher on your behalf. The installer must be MCS certified and meet MCS standards, which is why choosing a certified company matters whatever happens to the funding.

Should you wait or go ahead?

It is tempting to rush because of a headline, but we would not make a decision on that alone. A heat pump is a long-term investment, so the right questions are about your home. Is it well insulated? Does it suit low-temperature heating? Will the running costs make sense for you? A grant is a bonus, not the reason to buy.

If a heat pump already suits your home, getting a proper survey and a clear written quote now means you will know your costs under the current rules. If it does not suit your home, no subsidy will change that. Ask any installer how the quote would change if the grant were reduced, so you are not surprised later.

What should you do next?

Keep an eye on official announcements from the government and Ofgem rather than headlines, as the details of any change will be published there. In the meantime, you can read how air source heat pumps work and what suits different homes. Our guide to R290 heat pumps also explains the newer refrigerant technology you may be offered.

Talk to Grant Store about a heat pump

Grant Store Ltd is MCS-certified, an Octopus Trusted Partner and FCA authorised. We are based in Wigan and install solar panels, battery storage and air source heat pumps for homeowners across England. Get an instant estimate at quote.grant-store.com/heatpump, or call us on 01942 918844.

Written by Gareth Whitehill