Heat Pump vs Gas Boiler Running Costs: A 2026 Guide for London and Kent

Is a heat pump cheaper to run than a gas boiler?

Yes, a heat pump can be cheaper to run than a gas boiler, provided it is installed in a well-insulated home and paired with an optimised electricity tariff. While electricity costs more per unit than gas, the superior efficiency of a heat pump—often 300% or more—allows it to compete with or outperform modern gas boilers on annual running costs.

How do 2026 energy prices affect your heating bills?

As of the October–December 2026 Ofgem price cap, electricity is priced at 26.32p/kWh and gas at 7.97p/kWh [1, 2]. Because electricity is significantly more expensive per unit, the financial viability of a heat pump relies heavily on its Seasonal Coefficient of Performance (SCOP) [6, 9]. A heat pump that achieves an SCOP of 3.0 or higher typically reaches cost parity with, or becomes cheaper than, a 90%-efficient gas boiler [5, 8]. For homeowners in London and Kent, where housing stock varies from Victorian terraces to modern builds, ensuring your property is well-insulated is the most effective way to maximise this efficiency [10].

Why does system efficiency matter so much?

Efficiency is the "secret sauce" of heat pump economics. A modern condensing gas boiler is limited to roughly 90% efficiency [2, 3]. In contrast, an air source heat pump moves heat rather than creating it, meaning it can deliver three to four units of heat for every one unit of electricity consumed [7, 8]. If your system is designed to run at lower flow temperatures—such as with underfloor heating or oversized radiators—you can achieve higher SCOP ratings, which directly lowers your annual energy expenditure [5].

Can a specialist tariff change the maths?

One of the most significant opportunities for homeowners in the South East is switching to a heat-pump-specific electricity tariff [1, 9]. These tariffs offer cheaper rates during off-peak hours, allowing you to "pre-heat" your home when electricity is less expensive [4, 10]. By shifting your heating load to these windows, many households can see annual savings of £200 to £500 compared to standard tariffs [1]. Furthermore, if you choose to remove your gas connection entirely, you eliminate the daily gas standing charge, providing an additional annual saving [1, 4].

What are the upfront costs and grants available?

While running costs are competitive, the initial investment differs [4]. A new gas boiler typically costs between £2,500 and £4,000 [1, 2]. A heat pump installation is more expensive, often around £12,000, but this is significantly offset by the government’s Boiler Upgrade Scheme (BUS), which provides a £7,500 grant for eligible homeowners in England and Wales [1, 2, 3]. For many, this brings the net cost of a heat pump close to that of a premium boiler replacement [10].

Key takeaways

• Heat pumps are highly efficient, often delivering 300%–400% efficiency compared to 90% for gas boilers [7, 8].
• Running costs are highly dependent on your home's insulation levels and the heat pump's SCOP [10].
• Switching to a dedicated heat pump electricity tariff can unlock significant annual savings [1, 9].
• The £7,500 Boiler Upgrade Scheme grant makes the transition to low-carbon heating financially accessible for many London and Kent residents [1, 2].
• Removing your gas supply entirely can save you money by eliminating the gas standing charge [1, 4].