Government plans to slash heat-pump grants, risking £230 annual savings for thousands

The government is preparing to slash the budget of the Boiler Upgrade Scheme, a £2.7 bn programme that subsidises heat-pump replacements and underpins the Warm Homes Plan. The scheme, which has supported nearly 80 000 installations, typically yields an average annual saving of £230 for participating households. Critics, including Nesta and energy-poverty charities, argue that a sudden withdrawal would cripple the emerging market and disproportionately affect families that could benefit most.

Treasury officials view the non-means-tested grant as largely accessed by middle-class homes, but advocates call for targeted support for lower-income households, especially as the ECO4 programme ends. Industry leaders such as Octopus Energy’s Greg Jackson label the move “short-sighted,” noting the modest share of the defence budget the scheme represents. The Department for Energy Security and Net Zero says any defence-related savings are a small portion of its overall spending plan.