Replacing an Oil Boiler? Heat Pump Grants Are Increasing to £9,000

Replacing an Oil Boiler? The UK Heat Pump Grant Is Rising to £9,000 in July 2026

If your home is currently heated by an oil boiler or LPG system, there is significant news that affects the cost of switching to a heat pump. On 21 April 2026, the UK government officially announced an increase to the Boiler Upgrade Scheme (BUS) grant specifically for off-grid homes rising from £7,500 to £9,000 for properties replacing oil or LPG heating systems. The increase comes into effect from July 2026 and is currently confirmed to run until March 2027. For rural and off-grid households, this is the highest level of government financial support that has ever been available for switching to low-carbon heating. But as with any grant-funded installation, the money only represents value if the system it funds is properly designed for the property and that is the part the grant announcement does not cover.

What Is the Boiler Upgrade Scheme?

The Boiler Upgrade Scheme is a UK government grant programme administered by Ofgem on behalf of the Department for Energy Security and Net Zero. It provides upfront funding to help homeowners and small businesses in England and Wales replace fossil fuel heating systems with low-carbon alternatives, primarily air source and ground source heat pumps. The grant is applied directly by your MCS-certified installer and deducted from your installation invoice before you pay you never handle the money yourself. The scheme has been running since May 2022 and has recently been confirmed to continue until at least 2030 as part of the government's Warm Homes Plan. For homes on mains gas, the standard grant remains £7,500. The £9,000 level applies specifically and exclusively to properties currently using heating oil or LPG.

What Has Changed and Why

The increase to £9,000 for oil and LPG homes was driven by two factors. First, oil prices have risen significantly due to geopolitical instability, hitting off-grid households who have no energy price cap protection particularly hard. Second, the Boiler Upgrade Scheme had an estimated underspend of around £65 million as of March 2026, and the government needed to demonstrate the scheme was achieving its intended purpose of accelerating the switch away from fossil fuels. The £1,500 uplift is specifically targeted at the households most exposed to volatile fossil fuel costs and most likely to benefit from switching to a heat pump rural properties, larger detached homes, and older off-grid buildings that have historically faced the highest heating bills. One additional change of significant practical importance: the EPC requirement for the Boiler Upgrade Scheme was completely removed in April 2026. You no longer need a valid Energy Performance Certificate to qualify, and there is no longer any requirement to address insulation recommendations before applying. This removes one of the most common barriers that previously prevented eligible homeowners from accessing the grant.

Who Qualifies for the £9,000 Grant?

The increased grant applies to homes and small businesses in England and Wales that currently use heating oil (kerosene) or liquefied petroleum gas as their primary heat source. The property must be an existing home new builds are not eligible. The installation must be carried out by an MCS-certified installer who applies for the grant on your behalf before work begins. Social housing is not eligible, but self-build properties can qualify. Scotland has a separate scheme through Home Energy Scotland, which offers up to £9,000 grant plus up to £7,500 interest-free loan. Northern Ireland does not currently have an equivalent scheme. If your property previously received government grant funding specifically for a heat pump installation, it may not be eligible for a further BUS grant but this is worth confirming with your installer as the rules have changed with recent amendments.

Does the Grant Guarantee a Well-Performing System?

No and this is the most important point in this entire article, and the one that no installer or comparison site will tell you clearly. The grant reduces the upfront installation cost. It does not guarantee the system will heat your home comfortably, run efficiently, or produce electricity bills lower than your current oil costs. A heat pump that has been incorrectly sized, poorly commissioned, or installed without a proper room-by-room heat loss calculation will underperform regardless of how much grant funding was used to pay for it. This is not a theoretical risk. It is something we see regularly systems that were grant-funded, installed in good faith, and are now producing electricity bills higher than expected, houses that struggle to stay warm in cold weather, and homeowners who are frustrated because nobody told them the installation quality was the critical variable, not the grant amount.

Why Oil Boiler Homes Need Particularly Careful System Design

Many of the properties eligible for the £9,000 grant are exactly the type of home where system design matters most. Rural properties, older detached homes, and larger country houses with oil boilers tend to have higher heat loss than modern urban homes through solid walls, older windows, exposed locations, and larger floor areas. This does not mean heat pumps cannot work in these properties. Many perform extremely well. But it does mean that the design work heat loss per room, radiator sizing at the intended flow temperature, assessment of whether existing radiators are adequate or need upgrading, hot water cylinder sizing, and overall system layout becomes more important, not less, in these properties. A system that is sized on a rough calculation and installed quickly to meet grant deadlines is a system that may struggle from day one. Our article on whether heat pumps work in poorly insulated houses covers the design requirements for older and less efficient properties in detail.

What About Radiators in Oil-Heated Homes?

This is one of the most common practical questions from homeowners considering the switch. Oil boilers typically run at high flow temperatures 70°C or above and the radiators in oil-heated homes are often sized around those high temperatures. A heat pump runs most efficiently at 35–50°C, which means those same radiators deliver less heat output per radiator than they did with the oil boiler. Whether you need new or larger radiators depends entirely on a proper calculation not a general assumption. In some oil-heated homes, particularly larger properties with big traditional radiators, the existing radiators are already large enough for heat pump use. In others, particularly where rooms have single-panel radiators, upgrades will be needed in some areas. Our full guide on whether heat pumps need bigger radiators explains exactly how this is assessed and what the options are, including alternatives to full radiator replacement.

What About Running Costs After Switching From Oil?

The economic case for switching from oil to a heat pump is genuinely strong at current oil prices significantly stronger than the case for switching from mains gas. Oil and LPG prices are volatile, have no price cap protection, and have risen sharply in recent months due to global supply pressures. A correctly designed heat pump running at appropriate flow temperatures on an off-peak electricity tariff can produce running costs that are meaningfully lower than oil heating particularly for larger rural homes with higher annual fuel consumption. Our honest UK guide to heat pump running costs versus fossil fuels covers the realistic comparison in detail, including what conditions are needed to achieve genuine savings and what happens when they are not met.

Will the Grant Increase Drive More Installations?

Almost certainly and quickly. A £9,000 grant represents a very significant reduction in the net cost of a heat pump installation for an oil-heated home, particularly when combined with the 0% VAT currently applied to heat pump installations. The increase is already generating a significant rise in enquiries across the UK. This matters practically because it means demand for MCS-certified installers will increase substantially ahead of July 2026, and well-regarded installers will become booked up quickly. It also means that the quality of installation work across the sector will be stretched historically, grant-driven installation surges have been accompanied by a rise in poorly designed and hastily commissioned systems. This is not a reason to delay a decision, but it is a reason to be thorough about choosing an installer and ensuring proper design work is carried out before installation begins.

The Most Important Thing to Do Before Committing

Before contacting installers and starting the grant process, the single most valuable thing you can do is understand what your property actually needs. This means a proper heat loss assessment, room-by-room radiator sizing review, assessment of the hot water system, and confirmation of what flow temperature the system will need to run at to heat your home comfortably. This is what separates a system that performs well from one that does not and it is independent work that should be done before any installer is appointed. Our Pre-Installation Design and Heat Loss Review covers all of this in full, giving you a clear picture of exactly what your property needs before you make any financial commitment. If you already have a heat pump installed and it is not performing as expected, our Full Performance Review can identify what is going wrong and what needs to change.