Heat Pump vs Gas Boiler in 2025: The Real Running Cost Comparison
🔍 Key Findings
- An air source heat pump costs just £14 more per year to run than a new A-rated gas boiler
- Heat pumps save £340/year compared to an old G-rated gas boiler
- On a specialist heat pump tariff, ASHPs can be £250+/year cheaper than gas
- Net upfront cost with BUS grant: £3,500 vs £3,800 for a new gas boiler
There's widespread confusion about whether heat pumps are more expensive to run than gas boilers. This guide cuts through the noise with real 2025 data, explaining why the answer depends critically on which tariff you're on and the age of your current boiler.
Understanding the Efficiency Gap
The running cost debate centers on two key facts:
- Electricity is 4x more expensive than gas per unit (kWh) on standard tariffs
- Heat pumps are 3x more efficient than gas boilers at converting energy into heat
A heat pump achieves a Seasonal Coefficient of Performance (SCoP) of around 3. This means for every 1 unit of electricity consumed, it delivers 3 units of heat to your home. It does this by extracting heat from the outside air and amplifying it through a refrigeration cycle. A gas boiler, even a new A-rated model, has a seasonal efficiency of around 90% - it generates heat by burning gas.
Why This Matters
If electricity is 4x the price but the heat pump is 3x more efficient, the running costs are roughly comparable. However, the story changes completely when you factor in specialist heat pump tariffs.
Annual Running Costs: The Real Numbers
| Heating System | Annual Cost | vs New Gas Boiler |
|---|---|---|
| Old Gas Boiler (G-rated, 15+ years) | £1,100 | +£340 |
| ASHP on Standard Electricity Tariff | £827 | +£67 |
| New A-Rated Gas Boiler | £760 | Baseline |
| ASHP on Specialist Heat Pump Tariff (e.g., Cosy Octopus) | £574 | -£186 Saving |
*Figures based on a typical 2-3 bedroom semi-detached home with average insulation. Gas price: 6.24p/kWh. Standard electricity: 24.5p/kWh. Heat pump tariff: ~15p/kWh average. Source: Energy Saving Trust, Ofgem Price Cap 2025.
The Tariff Game-Changer
The single most important factor determining a heat pump's running cost is your electricity tariff. Standard variable rates make heat pumps more expensive than gas. Specialist heat pump tariffs make them significantly cheaper.
What Are Heat Pump Tariffs?
Energy suppliers have introduced specialist tariffs designed for heat pump owners, offering:
- Lower electricity rates, especially during off-peak hours (typically overnight)
- Time-of-use pricing that lets you heat your home when electricity is cheapest
- Average rates of 12-17p/kWh vs 24.5p/kWh on standard tariffs
💰 Real-World Example: Monthly Bills
Top Heat Pump Tariffs in 2025
- Octopus Cosy - 12p/kWh off-peak, average ~15p/kWh
- E.ON Next Heat Pump - Competitive time-of-use rates
- British Gas Heat Pump - Fixed rates lower than standard
- OVO Heat Pump Tariff - Variable rates optimized for heat pumps
Upfront Cost Comparison (2025)
New A-Rated Gas Boiler
Air Source Heat Pump
15-Year Total Cost of Ownership
When you factor in installation, running costs, and maintenance over a typical 15-year lifespan:
| System | Install | 15yr Running | Maintenance | Total |
|---|---|---|---|---|
| New Gas Boiler | £3,800 | £10,500 | £1,500 | £15,800 |
| ASHP (Specialist Tariff) | £3,500 | £9,000 | £2,250 | £14,750 |
💡 The Verdict
Over 15 years, a heat pump on a specialist tariff costs £1,050 less than a gas boiler, while delivering superior heating performance and zero carbon emissions.
Pros & Cons: Heat Pumps
Advantages
- • 3x more efficient than gas boilers
- • Cheaper to run on specialist tariffs
- • Zero carbon emissions at point of use
- • Can provide cooling in summer
- • Lower net cost with £7,500 BUS grant
- • 15-20 year lifespan
- • Future-proof as UK moves to net zero
Disadvantages
- • Higher upfront cost (pre-grant)
- • Works best with good insulation
- • Lower flow temperatures (radiators may need upgrading)
- • External unit requires garden space
- • Slightly higher maintenance costs
- • Requires specialist heat pump tariff for savings
Is a Heat Pump Right for You?
A heat pump is an excellent choice if:
- You're replacing an old, inefficient boiler (G-F rated)
- Your home has decent insulation (EPC C or better ideal, but D acceptable)
- You can switch to a specialist heat pump tariff
- You want to future-proof your heating system
- You have outside space for the external unit
- You qualify for the £7,500 BUS grant
⚠️ When to Stick with Gas (For Now)
A new gas boiler may be more practical if:
- Your current boiler is less than 5 years old and efficient
- Your home has poor insulation (EPC E-G) and you can't afford to insulate first
- You rent and can't make major alterations
- You need an immediate, lower-cost replacement
The Future of Heating in the UK
Important clarifications about UK heating policy:
- There is NO ban on replacing existing gas boilers with new ones
- The 2025 policy only affects new-build homes, which must install low-carbon heating
- All new gas boilers are "hydrogen-blend ready" for future fuel transitions
- Existing gas boilers can continue to be replaced indefinitely
Our Recommendation
If you're replacing a boiler in 2025 and qualify for the BUS grant, a heat pump is the smarter long-term investment.
The net upfront cost is competitive (£3,500 vs £3,800 for gas), and on a specialist tariff, you'll save £186-253 per year. Over 15 years, you'll be over £1,000 better off while enjoying superior efficiency and zero emissions.
However, it's crucial to insulate your home first if it's poorly insulated, and to switch to a heat pump tariff immediately after installation to maximize savings.
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