Heat Pump Running Costs vs Gas Boiler: Real Numbers for 2026
Introduction
The question every homeowner asks before switching to a heat pump is the same: "Will it actually cost less to run than my gas boiler?" The honest answer is that it depends on several factors, including your electricity tariff, your heat pump's efficiency, your home's insulation and how you manage the system. But with real 2026 numbers, you can get a clear and reliable estimate.
This guide uses current OFGEM tariff data, real-world efficiency figures and transparent calculations to show you exactly what a heat pump costs to run, how it compares to gas, oil and LPG, and what the total cost of ownership looks like over 20 years.
For a broader overview of heat pump costs including installation, see our dedicated pages on air source heat pump costs and ground source heat pump costs.
Current Energy Prices: OFGEM Q2 2026
Under the OFGEM price cap for Q2 2026 (April to June), the standard unit rates for domestic energy are:
| Fuel | Unit rate (pence per kWh) | Standing charge (pence per day) |
|---|---|---|
| Electricity | 24.50p | 61.64p |
| Gas | 6.76p | 31.65p |
These are the default tariff rates. If you are on a fixed deal or a smart tariff, your rates may differ. We will cover smart tariffs separately below.
Oil and LPG are not regulated by OFGEM but current market prices are approximately:
| Fuel | Approximate cost (pence per kWh) |
|---|---|
| Heating oil (kerosene) | 6.5 to 8.0p |
| LPG (bulk delivery) | 8.0 to 11.0p |
Source: OFGEM price cap
Understanding COP and Why It Matters
A heat pump does not generate heat by burning fuel. It moves heat from the outside environment into your home using electricity. The ratio of heat delivered to electricity consumed is called the Coefficient of Performance (COP).
- COP of 3.0 means 3 kWh of heat for every 1 kWh of electricity used.
- COP of 4.0 means 4 kWh of heat for every 1 kWh of electricity used.
The Seasonal Coefficient of Performance (SCOP) is the average COP over an entire heating season, accounting for variations in outdoor temperature, defrost cycles and part-load operation.
Typical real-world SCOP values:
| System type | Typical SCOP |
|---|---|
| Air source heat pump (radiators) | 2.8 to 3.2 |
| Air source heat pump (underfloor heating) | 3.2 to 3.8 |
| Ground source heat pump (radiators) | 3.5 to 4.0 |
| Ground source heat pump (underfloor heating) | 4.0 to 4.5 |
The higher the SCOP, the less electricity you use and the lower your running costs. System design, correct sizing and low flow temperatures are the main factors that determine real-world SCOP. Our running costs guide explains how to maximise efficiency.
Real Annual Heating Costs by Fuel Type
For a typical UK three-bedroom semi-detached house with a heat demand of 12,000 kWh per year:
Gas Boiler (90% Efficiency)
- Useful heat needed: 12,000 kWh
- Gas consumed: 12,000 / 0.90 = 13,333 kWh
- Annual fuel cost: 13,333 x 6.76p = 901 pounds
Oil Boiler (85% Efficiency)
- Gas consumed equivalent: 12,000 / 0.85 = 14,118 kWh
- Annual fuel cost at 7.0p/kWh: 14,118 x 7.0p = 988 pounds
LPG Boiler (85% Efficiency)
- LPG consumed: 12,000 / 0.85 = 14,118 kWh
- Annual fuel cost at 9.5p/kWh: 14,118 x 9.5p = 1,341 pounds
Air Source Heat Pump (SCOP 3.0)
- Electricity consumed: 12,000 / 3.0 = 4,000 kWh
- Annual electricity cost: 4,000 x 24.50p = 980 pounds
Air Source Heat Pump (SCOP 3.5)
- Electricity consumed: 12,000 / 3.5 = 3,429 kWh
- Annual electricity cost: 3,429 x 24.50p = 840 pounds
Ground Source Heat Pump (SCOP 4.0)
- Electricity consumed: 12,000 / 4.0 = 3,000 kWh
- Annual electricity cost: 3,000 x 24.50p = 735 pounds
Summary Table
| Heating system | Annual fuel cost | vs Gas boiler |
|---|---|---|
| Gas boiler (90%) | 901 pounds | baseline |
| Oil boiler (85%) | 988 pounds | 87 pounds more |
| LPG boiler (85%) | 1,341 pounds | 440 pounds more |
| ASHP (SCOP 3.0) | 980 pounds | 79 pounds more |
| ASHP (SCOP 3.5) | 840 pounds | 61 pounds less |
| GSHP (SCOP 4.0) | 735 pounds | 166 pounds less |
Key insight: At standard OFGEM tariff rates, a heat pump with an SCOP below about 3.2 will cost slightly more to run than a gas boiler. Above 3.2, the heat pump becomes cheaper. This crossover point is entirely dependent on the ratio of electricity to gas prices.
For oil and LPG homes, a heat pump is cheaper to run at virtually any SCOP, making the financial case much stronger.
The Impact of Smart Tariffs
Standard tariffs paint an incomplete picture. A growing number of electricity tariffs offer significantly cheaper rates during off-peak hours, typically overnight, which is exactly when heat pumps can pre-heat your home and hot water cylinder.
Examples of Smart Tariffs (2026)
| Tariff | Off-peak rate | Peak rate | Off-peak hours |
|---|---|---|---|
| Octopus Go | 12.0p/kWh | 28.0p/kWh | 00:30 to 04:30 |
| Octopus Cosy | 12.0p/kWh | 26.0p/kWh | 04:00 to 07:00, 13:00 to 16:00 |
| Intelligent Octopus Go | 12.0p/kWh | 28.0p/kWh | 23:30 to 05:30 (flexible) |
If you can shift 60 to 70 per cent of your heat pump's electricity consumption to off-peak hours (achievable with a well-insulated home and a hot water cylinder), the effective blended rate drops to approximately 16 to 18p/kWh.
ASHP (SCOP 3.0) on a Smart Tariff at 17p/kWh Blended
- Electricity consumed: 4,000 kWh
- Annual cost: 4,000 x 17.0p = 680 pounds
- Saving vs gas boiler: 221 pounds per year
This transforms the economics entirely. A heat pump that is marginally more expensive than gas on a standard tariff becomes significantly cheaper on a smart tariff.
Seasonal Variation in Running Costs
Heat pump electricity consumption is not evenly distributed through the year. A typical monthly pattern for a 12,000 kWh annual demand:
| Month | Approx. electricity use (kWh) | Approx. cost at 24.50p |
|---|---|---|
| January | 650 | 159 pounds |
| February | 580 | 142 pounds |
| March | 480 | 118 pounds |
| April | 320 | 78 pounds |
| May | 150 | 37 pounds |
| June | 80 | 20 pounds |
| July | 60 | 15 pounds |
| August | 60 | 15 pounds |
| September | 120 | 29 pounds |
| October | 350 | 86 pounds |
| November | 500 | 123 pounds |
| December | 650 | 159 pounds |
| Total | 4,000 | 980 pounds |
Note: June to August consumption is primarily for hot water, as space heating demand is minimal.
This seasonal pattern has important implications for budgeting. Your winter electricity bills will be noticeably higher than summer bills. If you are used to a gas direct debit that smooths costs across the year, ask your electricity supplier about a similar arrangement.
Hot Water Costs
A heat pump heats your domestic hot water as well as your space heating. For a typical household using 3,000 kWh of hot water energy per year:
| System | Hot water cost |
|---|---|
| Gas boiler (90%) | 225 pounds |
| ASHP (COP 2.5 for hot water) | 294 pounds |
| ASHP with smart tariff (COP 2.5, 12p/kWh) | 144 pounds |
| GSHP (COP 3.0 for hot water) | 245 pounds |
Hot water COP is typically lower than space heating COP because the water needs to reach higher temperatures (50 to 55 degrees Celsius). Heat pumps with the option to schedule hot water heating during off-peak tariff windows can significantly reduce this cost.
20-Year Total Cost of Ownership
The true comparison between a heat pump and a gas boiler must include upfront costs, running costs, maintenance, boiler replacement and the impact of the BUS grant. Here is a 20-year TCO for a three-bedroom semi-detached house.
Assumptions
- Heat demand: 12,000 kWh/year
- Energy prices: assumed to rise at 3% per year (broadly in line with long-term trends)
- Gas boiler replaced once at year 15 (lifespan 12 to 15 years for modern condensing boilers)
- Heat pump lifespan: 20 years (ASHP) or 25 years (GSHP, but calculated at 20 for fair comparison)
- Maintenance: gas boiler 100 pounds/year, ASHP 150 pounds/year, GSHP 120 pounds/year
Gas Boiler
| Cost element | Amount |
|---|---|
| Initial boiler installation | 3,000 pounds |
| Replacement boiler at year 15 | 3,500 pounds |
| Running costs (20 years, 3% inflation) | 24,200 pounds |
| Maintenance (20 years) | 2,000 pounds |
| Total | 32,700 pounds |
Air Source Heat Pump (SCOP 3.0, Standard Tariff)
| Cost element | Amount |
|---|---|
| Installation cost | 11,000 pounds |
| BUS grant | minus 7,500 pounds |
| Running costs (20 years, 3% inflation) | 26,340 pounds |
| Maintenance (20 years) | 3,000 pounds |
| Total | 32,840 pounds |
Air Source Heat Pump (SCOP 3.2, Smart Tariff)
| Cost element | Amount |
|---|---|
| Installation cost | 11,000 pounds |
| BUS grant | minus 7,500 pounds |
| Running costs (20 years, 3% inflation, blended 17p) | 17,000 pounds |
| Maintenance (20 years) | 3,000 pounds |
| Total | 23,500 pounds |
Ground Source Heat Pump (SCOP 4.0, Standard Tariff)
| Cost element | Amount |
|---|---|
| Installation cost | 24,000 pounds |
| BUS grant | minus 7,500 pounds |
| Running costs (20 years, 3% inflation) | 19,760 pounds |
| Maintenance (20 years) | 2,400 pounds |
| Total | 38,660 pounds |
Key Takeaways
- On a standard electricity tariff, an ASHP with average efficiency is roughly cost-neutral compared to gas over 20 years. The BUS grant is what makes the economics work.
- On a smart tariff, the ASHP becomes clearly cheaper than gas, saving approximately 9,000 pounds over 20 years.
- A GSHP has the lowest running costs but the highest upfront cost. The 20-year TCO is higher than an ASHP unless you factor in the 25+ year lifespan of the ground loop and the avoided second boiler replacement.
- For oil and LPG homes, a heat pump is overwhelmingly cheaper over 20 years at any efficiency level.
Use our heat pump calculator to run these numbers with your own property details and tariff.
How to Minimise Your Running Costs
1. Maximise Your Heat Pump's Efficiency
Keep flow temperatures as low as possible. Use weather compensation controls. Ensure the system is properly commissioned. Every 0.1 increase in SCOP saves approximately 25 to 35 pounds per year for a typical home.
2. Switch to a Smart Tariff
This is the single most impactful action you can take. Pre-heating your home and hot water during off-peak hours can reduce effective electricity costs by 30 to 40 per cent.
3. Improve Insulation
Better insulation means lower heat demand, which means less electricity consumed. Loft insulation, draught-proofing and floor insulation are the most cost-effective measures. See our guide on heat pumps in Victorian houses for specific advice on period properties.
4. Use Your Controls Intelligently
Set heating schedules that match your occupancy patterns. Avoid the temptation to boost the system to high temperatures for quick warm-up. A heat pump works best when maintaining a steady, moderate temperature over longer periods.
5. Monitor Your System
Many modern heat pumps include monitoring apps or can be connected to third-party monitors. Track your COP weekly and investigate any sudden drops, which may indicate a fault, blocked filter or incorrect settings.
The Electricity-to-Gas Price Ratio
The single most important variable in the heat pump running cost calculation is the ratio of electricity price to gas price. At Q2 2026 OFGEM rates:
24.50 / 6.76 = 3.63
This means electricity is 3.63 times more expensive than gas per kWh. For a heat pump to be cheaper to run than a 90 per cent efficient gas boiler, its SCOP must exceed:
3.63 x 0.90 = 3.27
If the government follows through on proposals to rebalance energy levies by shifting green levies from electricity bills to gas bills (or to general taxation), this ratio could drop to 2.5 to 3.0, which would make virtually all heat pumps cheaper to run than gas boilers at any reasonable efficiency level.
This policy direction has been signalled by multiple government reviews and is widely expected to be implemented before 2030. It represents a significant potential upside for heat pump economics that is not captured in today's numbers.
Comparing Against the Full Picture
Running costs are only one part of the heat pump vs gas boiler decision. Other factors include carbon emissions (a heat pump eliminates direct fossil fuel use), home comfort (heat pumps provide more even, consistent warmth), air quality (no combustion products) and future-proofing (gas boilers face a new-build ban from 2025 and potential future restrictions on existing installations).
The Boiler Upgrade Scheme makes the financial case significantly stronger by reducing the upfront cost differential. Explore our grant guide for full details on eligibility and how to apply.
Frequently Asked Questions
Are heat pumps cheaper to run than gas boilers in 2026?
At standard OFGEM tariff rates, a heat pump with an SCOP of 3.2 or above is marginally cheaper to run than a 90 per cent efficient gas boiler for space heating alone. On a smart electricity tariff with off-peak rates of 12p/kWh, the savings are substantial, typically 200 to 400 pounds per year for an average home. For oil and LPG homes, heat pumps are clearly cheaper to run regardless of tariff.
What SCOP do I need to break even with gas?
At Q2 2026 OFGEM prices (electricity 24.50p, gas 6.76p), a heat pump needs an SCOP of approximately 3.27 to match the running cost of a 90 per cent efficient gas boiler. On a smart tariff at 17p blended rate, the break-even SCOP drops to approximately 2.26, which virtually all modern heat pumps exceed comfortably.
Will energy prices change in a way that favours heat pumps?
Government policy is moving towards rebalancing the electricity-to-gas price ratio by shifting environmental levies from electricity bills. If implemented, this would reduce the break-even SCOP and make heat pumps cheaper to run for more homes. However, no firm timeline has been confirmed, so it is prudent to base your decision on current prices while recognising the likely favourable direction of travel.
Sources
- Ofgem, "Energy price cap Q2 2026": https://www.ofgem.gov.uk/check-if-energy-price-cap-affects-you
- Energy Saving Trust, "Heat pump running costs": https://energysavingtrust.org.uk/advice/air-source-heat-pumps/
- GOV.UK, "Boiler Upgrade Scheme": https://www.gov.uk/guidance/apply-for-the-boiler-upgrade-scheme
- MCS, "Heat pump performance data": https://mcscertified.com/standards-tools-library/
- GOV.UK, "Heat and buildings strategy": https://www.gov.uk/government/publications/heat-and-buildings-strategy
For further reading
Related guides:
- Air-source vs ground-source heat pump
- Best heat pump brands UK
- Boiler Upgrade Scheme: complete guide
- Boiler Upgrade Scheme: step by step
- Heat pump for a 3-bed semi
- Heat pump COP explained
Resources: