ARCHIVED ARTICLE This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Image of Leanne Macardle

Leanne Macardle

Freelance Contributor
Published: 29/04/2022
Air source heat pump against an orange wall

News contents

In an attempt to combat the rising cost of living, homeowners are increasingly looking for ways to lower their energy costs – and one option that’s growing in popularity is installing an air source heat pump. But could it be worth considering?

Rising prices

Energy costs have ramped up spectacularly in recent months, with it now costing a typical household almost £2,000 a year for gas and electricity thanks to the increased price cap that came into effect on 1 April.

The Government has attempted to counteract this by offering householders a £150 council tax rebate, while a £200 reduction in energy bills is due to be implemented in October (although this £200 will need to be paid back over five years). It’s also launched the Boiler Upgrade Scheme, which is designed to encourage households to install low-carbon heating systems, such as heat pumps.

The scheme offers a £5,000 grant towards the cost and installation of an air source heat pump or biomass boiler, or £6,000 towards the cost of a ground source heat pump. This could partly explain the rising popularity of air source heat pumps, though data from Rated People suggests that for many, it’s simply to save money.

Their research found that 52% of homeowners want to make their homes more environmentally friendly this year in order to save money on bills, while 36% hope to make long-term financial savings. Given that there’s been a 312% year-on-year uplift in demand for heat pumps, according to the number of jobs posted by homeowners on the find-a-tradesperson platform, it’s a trend that looks set to continue.  

Upfront costs…

Despite the Government grant, the £5,000 discount is unlikely to cover the full installation cost of an air source heat pump, which can amount to between £7,000 and £13,000 according to the Energy Saving Trust. As such they’re only going to be suitable for those who have the means to cover such a large initial outlay, with low-income households who are already struggling likely locked out.

“It is a complex installation and usually requires for the whole of the central heating system to be replaced – which is naturally very expensive,” says Andy Kerr, founder at boiler purchasing service BOXT. “The installation alone is very expensive and usually is around five times more expensive than a replacement gas boiler – and even with the new grants available via the Boiler Upgrade Scheme will have a significantly larger upfront cost than a gas boiler.”

… for long-term benefit?

Yet despite the cost involved, for those who can afford it, the long-term benefit could be worth the initial outlay. Air source heat pumps work by transferring heat from the air to provide heating and hot water for a home and are highly efficient at doing so, and according to the Energy Saving Trust, could save homeowners thousands of pounds a year on their heating bills.

For example, a typical four-bed detached home that replaced an old (G-rated) gas boiler with an air source heat pump could save £910 a year on fuel bills, rising to £3,400 a year if it replaced an old LPG boiler.

However, the cost benefits will vary depending on the type of fuel system being replaced, the size of the home and the amount of energy being used. Indeed, replacing a new (A-rated) gas boiler with a heat pump could even work out more expensive, costing an average of £115 a year more, so it’s important to crunch the numbers.

“Heat pumps are a good option for some homes looking to reduce their reliance on fossil fuels, however they aren’t always suitable,” continues Andy. “For example, they are ideal for newly built homes or homes that are not on the gas network that have been newly renovated and insulated to a high standard. They are also more ideal to work with underfloor heating due to them working at low temperatures for longer periods of time.”

Ways to cover the cost

Consumers who think that a heat pump could be suitable may be wondering how to pay for it. Alongside applying for the Government grant, turning to savings could be an option for those with a sufficient pot, or perhaps a loan or credit card for consumers who are comfortable with borrowing for this purpose. Plus, reading our tips on spring cleaning finances as the cost of living soars could help consumers get their finances under control.



Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart. will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be ScamSmart.