‘I’ve had my heat pump for a year - have I saved money?’

“Is your house actually warm?” and “Are you saving money?” are the top two questions that friends and family love to ask me about my heat pump.

Back in May, I wrote an article about what I’d learnt about installing an air source heat pump and using it for six months. Now, it’s been a year since my husband and I had an ancient boiler ripped out of our house, and welcomed the Daikin heat pump into our garden.

So, with 12 months of usage behind us, are we keeping warm, and have our energy bills gone down?

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The first question is fairly simple to answer: yes, our home is warm and cosy.

Last year we did a big renovation on our Edwardian terraced house in north London, which included adding insulation and new radiators.

After a teething period getting used to the heat pump, it does keep our house at a lovely, constant temperature. My husband, two children aged seven and eight, and I are all certainly warmer compared to when we were living with the old gas boiler (which we estimate had been in the house at least 30 years).

As I type this, the radiators are barely lukewarm, but the house is 20 degrees as the heat pump generates the heat during the cheap off-peak periods, and this warmth is retained throughout the day.

How much did the heat pump cost?

Onto the important matter of costs. In terms of the initial expense, we qualified for the £7,500 government grant, part of the Boiler Upgrade Scheme (BUS), so the net cost for the heat pump was about £6,000. We’re paying this off in interest-free monthly instalments.

The grant worked well for us: the installer applied for it, and it was easy and straightforward.

But with the Autumn Budget coming up on 26 November, could we see the generous grants reduced or withdrawn? Given that chancellor Rachel Reeves has refused to rule out increasing income tax – which would break an election pledge – it seems nothing will be off limits in this fiscal event.

I asked the government if the BUS scheme could feature in the Budget, and a spokesperson responded: “Funding for the Boiler Upgrade Scheme will continue up to 2029/30. Funding allocations for individual programmes, including the Boiler Upgrade Scheme, will be set out in our Warm Homes Plan.”

So, it seems the grants are safe, for now.

Heat pumps are slowly becoming more popular: a total of 4,089 applications for the BUS scheme were received in September 2025, marking a record high, according to the latest figures from the Department for Energy Security and Net Zero.

For air source heat pumps – the most popular fossil fuel heating system replacement under the scheme (you can also get grants for ground source heat pumps and biomass boilers) – 62,527 vouchers have been redeemed so far since the scheme launched in May 2022.

With a value of £7,500 per voucher, this equates to a £468,952,500 bill for the government. The figure rises when you add in vouchers for other heat pumps and biomass boilers.

While the government may have committed to the scheme until 2029/30, it has a history of breaking pledges and performing U-turns.

A scheme that has so far cost in excess of £460 million could be vulnerable to being scrapped sooner than planned.

If you’re thinking of applying for a grant, I suggest doing it as soon as possible.

Have I saved on my energy bills with a heat pump versus a gas boiler?

It’s slightly tricky working out the pre and post heat pump energy costs, and how our bills have changed. That’s because our old electricity meter generated a statement once a month based on a manual reading, whereas we now have a smart meter with our heat pump, which seems to conjure up the costs whenever it feels like it.

We also moved out of our home for 10 weeks last autumn during the renovation, so it’s not possible to calculate an exact comparison of 12 months with an old boiler and 12 months of a heat pump yet.

However, our energy provider Octopus Energy has helpfully provided our average daily cost between January and July 2024 (pre heat pump) and January and July 2025 (with the heat pump).

In 2024, the average daily cost was £5.08 (for both electricity and gas), with a typical electricity unit rate of 25.84p/kWh on the Flexible Octopus tariff.

This year, our average daily cost has fallen to £4.74 (for just electricity; we don’t have gas in the house anymore), with an average unit rate of 20.59p/kWh on the Cosy tariff.

So, our energy bills have fallen since we installed the heat pump. If we extrapolate the daily figures over a year, it gives an annual saving of £124.

The Energy Saving Trust suggests that households should save about £260 a year after replacing an old gas boiler with a heat pump – and some energy firms advertise much bigger savings than this – so our £124 figure seems underwhelming.

But, it’s not really a like-for-like comparison as our house is so much warmer now and we don’t worry about how much it costs to have the heating on. Before, we rationed the heating during the winter to just an hour or two each day. When the heating wasn’t on, the temperature plummeted quickly, and I’m not exaggerating when I say that I eventually got chillblains on my fingers from working from home in our cold house.

Octopus Energy points out that we could maximise our savings by “load shifting as much usage as possible” onto its super cheap times.

With the Cosy tariff – which is available to customers with a heat pump or electric boiler – electricity is about 51% cheaper during these periods: 4am - 7am, 1pm - 4pm, 10pm - 12am.

So, we always run the heat pump during these times, and the dishwasher. The washing machine is more tricky, as we prefer to pop a load on in the evening, when the kids are back from school and we can include their school uniform.

There is also a peak rate between 4pm and 7pm, when electricity costs 50% above the day rate and is therefore very expensive. This is impossible to avoid as that’s when we’re making dinner, so our usage during that time will be bumping up our bill.

How do the savings compare in terms of buying a gas boiler versus a heat pump?

So, we are saving money on our energy bills with a heat pump. But what happens when we factor in the cost of the heat pump versus if we’d chosen to buy a modern gas boiler instead?

According to checkatrade.com, the average cost of a new gas boiler, including installation, is £3,000.

Our heat pump cost a lot more than this, at £6,000 (after deducting the £7,500 government grant). However, we did also qualify for £2,000 cashback from our mortgage lender Halifax for making our home more energy efficient.

This gives a net cost of £4,000. Therefore, there’s a price difference of £1,000 between the heat pump and gas boiler.

If we continue to save £124 a year, that means we’re looking at a further seven years to pay it off.

I’m hopeful we’ll get better at “shifting our usage” onto the off-peak periods, and our annual saving will increase. And of course, if gas costs go up relative to electricity prices, we could save even more by being an electricity-only household.

So, I’m optimistic we’ll be cost neutral earlier than 2032.

In the meantime, as winter approaches, I’m a happy heat pump owner: our house is warm, we’re saving money on our energy bills, and we’re doing our bit for the planet by reducing carbon emissions.