grants

Home Upgrade Grant for Heat Pumps: 2026 Low-Income Guide

James Mitchell |

TL;DR

  • The Home Upgrade Grant (HUG) offers up to £10,000 for low-income households off the gas grid to install heat pumps or other energy upgrades.
  • Eligibility: Off-gas-grid homes in England, EPC rating D-G, household income under £36,000.
  • HUG vs ECO4 vs BUS: HUG is for low-income, off-gas-grid homes; ECO4 covers broader energy efficiency; BUS offers £7,500 for all income levels.
  • How to apply: Contact your local council-they manage HUG applications, not the government directly.
  • Next steps: Use our home suitability check to confirm your property qualifies, then find an MCS installer.

If you’re a UK homeowner struggling with high energy bills and relying on expensive oil, LPG, or electric heating, the Home Upgrade Grant (HUG) could be your route to a warmer, cheaper-to-run home. According to Ofgem, households off the gas grid spend £1,200 more per year on heating than those connected-yet many don’t realise they could qualify for thousands in funding to switch to a heat pump.

This guide cuts through the confusion around heat pump grants for low-income households. We’ll explain what the Home Upgrade Grant is, how it differs from the Boiler Upgrade Scheme (BUS) and ECO4, and-most importantly-how to apply if you’re eligible. With £10,000+ in potential funding, this could be the push you need to make your home more energy-efficient and future-proof.

What Is the Home Upgrade Grant (HUG) in 2026?

The Home Upgrade Grant (HUG) is a government-funded scheme designed to help low-income households in England replace inefficient heating systems with heat pumps, solar panels, or insulation. Unlike the Boiler Upgrade Scheme (BUS), which is open to all income levels, HUG specifically targets off-gas-grid homes with poor energy efficiency (EPC ratings D-G).

Key Facts About HUG

  • Funding: Up to £10,000 per household (average grant is £7,500-£10,000, depending on your local council).
  • Eligibility: Off-gas-grid homes, EPC D-G, household income under £36,000.
  • Duration: The current phase (HUG2) runs until March 2026.
  • Managed by: Local councils, not the central government.

HUG is part of the £1.3 billion Warm Homes: Local Grant programme, which aims to improve 130,000 homes by 2026. If you’re on oil, LPG, or electric heating, this grant could cover most or all of your heat pump installation costs.

Why Was HUG Created?

The UK has 2.2 million off-gas-grid homes, many of which rely on expensive and polluting heating fuels like oil or LPG. According to the Energy Saving Trust, these households spend £1,200-£1,800 more per year on heating than gas-connected homes. HUG was introduced to:

  • Reduce fuel poverty by lowering energy bills.
  • Cut carbon emissions by replacing fossil-fuel heating with heat pumps.
  • Improve home energy efficiency with insulation and smart heating controls.

Am I Eligible for the Home Upgrade Grant? (The 3 Key Checks)

Not all households qualify for HUG. Here’s how to check if you’re eligible:

1. Are You Off the Gas Grid?

HUG is only for homes not connected to the mains gas network. This includes:

  • Oil boilers
  • LPG (liquefied petroleum gas) boilers
  • Electric storage heaters
  • Solid fuel (coal, wood) heating

If you’re on mains gas, you won’t qualify for HUG-but you might be eligible for the Boiler Upgrade Scheme (BUS) instead.

2. Is Your Home’s EPC Rating D, E, F, or G?

Your home’s Energy Performance Certificate (EPC) must be D, E, F, or G to qualify. You can check your EPC for free on the GOV.UK EPC register.

If your EPC is C or above, you won’t qualify for HUG-but you may still be eligible for ECO4 or BUS.

3. Is Your Household Income Under £36,000?

HUG is means-tested, meaning it’s only for low-income households. The income threshold is typically:

  • £36,000 or less per year (before tax).
  • £20,000 or less in some local authority areas (check with your council).

If your income is above £36,000, you won’t qualify for HUG-but you could still get £7,500 through the Boiler Upgrade Scheme.

What If I Rent My Home?

If you’re a tenant, your landlord must apply for HUG on your behalf. The grant can’t be used for rented properties unless the landlord agrees to the upgrades. If your landlord refuses, you may still qualify for ECO4 (which has different rules for rented homes).

Home Upgrade Grant vs. ECO4 vs. Boiler Upgrade Scheme: Which Is for You?

With multiple heat pump grants available, it’s easy to get confused. Here’s a clear breakdown of the differences:

SchemeHome Upgrade Grant (HUG)ECO4Boiler Upgrade Scheme (BUS)
EligibilityOff-gas-grid, EPC D-G, income <£36kLow-income or vulnerable householdsAll income levels
Property TypeOff-gas-grid homes onlyOn or off-gas-gridOn or off-gas-grid
Grant ValueUp to £10,000Varies (often £5,000-£15,000)£7,500 (fixed)
Who Applies?Local councilEnergy suppliers (e.g., British Gas, EDF)Homeowner or landlord
Covers Heat Pumps?✅ Yes✅ Yes (but not always prioritised)✅ Yes
Covers Insulation?✅ Yes✅ Yes (main focus)❌ No
DurationUntil March 2026Until March 2026Until April 2028

Which Grant Should You Apply For?

  • If you’re off-gas-grid and on a low income → HUG (best option).
  • If you’re on-gas-grid and on a low income → ECO4 (check with your energy supplier).
  • If you’re not on a low income → Boiler Upgrade Scheme (BUS) (£7,500 grant).

Still unsure? Use our heat pump savings calculator to see which grant you’re most likely to qualify for.

How Much Funding Can You Get with the Home Upgrade Grant?

The amount you receive from HUG depends on:

  • Your local council’s funding allocation.
  • The type of upgrades you need (heat pump, insulation, solar panels).
  • Your home’s current energy efficiency.

Typical Grant Amounts

UpgradeAverage Grant ValueNotes
Air source heat pump£7,500-£10,000Covers most or all of the cost.
Ground source heat pump£10,000-£15,000More expensive, but higher grant possible.
Insulation (loft/cavity)£1,000-£3,000Often included alongside a heat pump.
Solar PV panels£2,000-£5,000Can be combined with a heat pump.

Illustrative Composite Based on Typical UK Installations

Meet Sarah, a homeowner in rural Devon:

  • Home: 3-bed cottage, off-gas-grid, heated by an oil boiler.
  • EPC rating: E (poor insulation, single-glazed windows).
  • Household income: £28,000 per year.
  • Upgrades needed: Air source heat pump + loft insulation.

HUG Grant Awarded: £9,500

  • Heat pump: £8,000 (covers most of the cost).
  • Loft insulation: £1,500 (fully funded).
  • Total out-of-pocket cost: £500 (for minor extras).

Result: Sarah’s annual heating bill drops from £1,800 to £600, and her home’s EPC improves to C.

Step-by-Step: How to Apply for a Heat Pump with the Home Upgrade Grant

Applying for HUG is different from BUS or ECO4-it’s managed by local councils, not the government or energy suppliers. Here’s how to do it:

Step 1: Check Your Eligibility

Before applying, confirm you meet the 3 key criteria:

  1. Off-gas-grid (oil, LPG, electric, or solid fuel heating).
  2. EPC rating D-G (check here).
  3. Household income under £36,000 (or £20,000 in some areas).

Step 2: Find Your Local Council’s HUG Page

HUG is not a centralised scheme-each council has its own application process. Search:

  • "[Your council name] Home Upgrade Grant" (e.g., "Devon County Council Home Upgrade Grant").
  • Or visit GOV.UK’s HUG page for a list of participating councils.

Step 3: Submit Your Application

Most councils require:

  • Proof of income (payslips, benefits letters).
  • EPC certificate (if you don’t have one, the council may arrange an assessment).
  • Heating system details (e.g., oil boiler age, fuel type).

Tip: If you’re unsure about your EPC, the council may cover the cost of a new assessment.

Step 4: Wait for Approval (2-8 Weeks)

Councils process applications in batches, so approval can take 2-8 weeks. If approved, you’ll receive a grant offer letter outlining the funding amount.

Step 5: Choose an MCS-Certified Installer

HUG only covers work by MCS-certified installers. Your council may provide a list of approved installers, or you can search the MCS database.

Tip: Get at least 3 quotes to ensure you’re getting a fair price.

Step 6: Installation & Final Checks

Once installed, the council will inspect the work to confirm it meets HUG standards. After approval, the grant is paid directly to the installer.

What Happens After You’re Approved? (Choosing an Installer and Heat Pump)

Once you’ve been approved for HUG, the next steps are:

  1. Selecting a heat pump (air source vs. ground source).
  2. Finding an MCS installer.
  3. Scheduling the installation.

1. Air Source vs. Ground Source Heat Pumps

TypeProsConsCost (After HUG Grant)
Air source heat pumpCheaper, easier to installLess efficient in very cold weather£1,000-£3,000
Ground source heat pumpMore efficient, lower running costsExpensive, needs garden space£5,000-£10,000

Most HUG recipients choose air source heat pumps due to lower upfront costs.

2. How to Choose an MCS Installer

3. What to Expect During Installation

  • Day 1: Removal of old heating system (oil boiler, etc.).
  • Day 2-3: Installation of heat pump (outdoor unit + indoor components).
  • Day 4: System testing and handover (installer explains how to use it).

Tip: Ask your installer about running costs-heat pumps are 3-4x more efficient than gas boilers.

FAQ

1. Can I get HUG if I’m on mains gas?

No. HUG is only for off-gas-grid homes. If you’re on mains gas, check the Boiler Upgrade Scheme (BUS) (£7,500 grant) or ECO4 (if on a low income).

2. What if my EPC is C or above?

You won’t qualify for HUG, but you may still be eligible for BUS or ECO4. Use our home suitability check to explore other options.

3. How long does HUG approval take?

Typically 2-8 weeks, depending on your council’s workload. Some councils process applications faster than others.

4. Can I combine HUG with other grants?

No. HUG cannot be combined with BUS or ECO4. However, you can use HUG alongside local council grants (e.g., for insulation).

5. What if my landlord refuses to apply for HUG?

If you’re a tenant, your landlord must apply for HUG. If they refuse, you may still qualify for ECO4 (which has different rules for rented homes).

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