The Short Answer
If your oil boiler is due for replacement, we'd get heat pump quotes before buying another one. On today's prices a heat pump heats a home for a lot less than oil. For a detached house using about 12,400 kWh of heat a year, that's about £1,650 on oil against £930 for a heat pump at a SCOP of 3.5, a saving of about £720 a year.
In England and Wales the Boiler Upgrade Scheme grant is £9,000 for a home heated by oil with no mains gas connection, until March 2027. At DESNZ's median for an 8.5kW install, that leaves about £3,700, close to the £3,300 average for a replacement oil boiler. So against a boiler you're replacing anyway, the heat pump costs about £400 more and, on our figures, saves that in under a year. Radiator work would add to the difference.
Estimate the Saving for Your Home
The calculator starts on an oil-heated detached house. It applies the £9,000 grant to oil, so if you have a mains gas connection, take off £1,500. It starts with a heat pump tariff switched on, so its saving matches the tariff row in the table below rather than the standard rate.
Pre-set for a detached house on oil (£1,650 a year of oil, our estimate from the median detached house's heat), with the install at the DESNZ median for 8.5kW. Put your own oil spend in if you know it.
1. What heats your home today?
Pick whichever your main heating uses.
Add up last year's bills, or use the typical figure for your home below.
3. What size is your home?
We use this to estimate the size of heat pump you'd need.
4. Do you have solar panels?
Free electricity from your roof cuts what the heat pump costs to run.
5. Your options
Both are on to start with. Leave them on unless you know they don't apply.
Your estimated saving
£941a year
Over 15 years that's around £14,115 off your heating bills.
Now: Oil boiler
£1,650 / year
With heat pump
£709 / year
You save
£941 / year
What about the upfront cost?
- Heat pump install (DESNZ median for this size)
- £12,700
- Less government grant
- -£9,000
- You pay
- £3,700
Like the look of £941 a year?
These are estimates. The only way to know your real saving is a free quote from an MCS-certified installer. Takes about 60 seconds, no obligation.
How we worked this out
Energy prices: Ofgem price cap for 1 October to 31 December 2026 (Direct Debit, GB average): gas 7.97p/kWh, electricity 26.32p/kWh. There is no VAT on domestic electricity from 1 October 2026 to 31 March 2027; the gas figure includes 5% VAT. Heat pump tariff blended at 20p/kWh (an estimate for Cosy Octopus, E.ON Next Pumped or EDF Heat Pump Tracker on a heat pump load profile, not a quoted rate). Heating oil 11.31p/kWh (111.52p/litre plus 5% VAT, over 10.35 kWh/litre; BoilerJuice UK average, 23 October 2026). LPG at the price you enter (we start from 75p a litre, our estimate: there's no published average).
Heat pump efficiency: a seasonal efficiency of 3.5. That sits between two measured figures: a median of 2.80 across 291 air source heat pumps in the government's Electrification of Heat trial (installed in 2020 and 2021, whole system), and an average of 4.01 across the 307 systems on heatpumpmonitor.org with a full year of data when we checked in October 2026, a self-selected group of air and ground source systems, mostly high temperature capable R290 units. The break-even with a 90% gas boiler on a standard tariff is a SCOP of about 2.97.
Typical bill ranges: for a 3-bed using 9,500 to 10,300 kWh of heat a year (DESNZ's median and mean gas use for 3 bedrooms in England and Wales, through a 90% boiler): gas £950 to £1,000 (with the standing charge, which the saving assumes you stop paying by having the gas supply disconnected), oil £1,250 to £1,350, LPG £1,200 to £1,300 on our LPG price, direct electric heating £2,500 to £2,700. At these prices a unit of heat from oil costs about 1.5 times as much as from gas, and from LPG about 1.4 times, which is why the saving from switching is bigger.
Solar: A 4kW system in central England generates around 3,800 kWh a year on our estimate (950kWh per kW). On the government's SAP 10.2 self-use formula, a typical 3-bed's heat pump uses about 350 kWh of that a year without a battery, and about 510 kWh with one (8 kWh usable). Most of its demand falls in winter, when panels make least, and the calculator works it out for your bill.
Install costs: DESNZ Boiler Upgrade Scheme statistics (August 2026), median cost of real installs by size: about £11,500 (4-6kW), £12,200 (6-8kW) and £13,900 (10-12kW). For the home size this page starts on, we've used the median for 8.5kW instead: about £12,700. New gas boiler about £2,750 (our estimate). The £7,500 grant is the Boiler Upgrade Scheme (gov.uk) for England and Wales; £9,000 for oil or LPG heating with no mains gas connection until March 2027, which this calculator applies when you choose oil or LPG (if you also have a mains gas connection, take that extra off).
Estimates only. Your actual saving depends on the installer, flow temperatures, your home's heat loss and your electricity tariff. Always get a heat loss survey from an MCS installer for an accurate quote.
What a Unit of Heat Costs
The fair comparison is the cost of a kWh of heat in the room, not a kWh of fuel. BoilerJuice's UK average for 1,000 litres of kerosene was 111.52p a litre on 23 October 2026, excluding 5% VAT, so about 117.1p with it. At 10.35 kWh a litre that's 11.31p per kWh of oil, and through a boiler at our assumed 85% efficiency, 13.3p per kWh of heat.
| Heating | Pence per kWh of heat |
|---|---|
| Oil boiler, 85% efficient | 13.3p |
| Air source heat pump, SCOP 3.5, standard rate (26.32p) | 7.5p |
| Air source heat pump, SCOP 3.5, heat pump tariff (our 20p blend) | 5.7p |
| Air source heat pump as measured in the government trial (2.8 units of heat per unit of electricity) | 9.4p |
| Gas boiler, 90% efficient (7.97p), for comparison | 8.9p |
A heat pump only needs a SCOP of about 2.0 to match oil on the standard rate. The Electrification of Heat trial, which monitored real installs in homes, found a median of 2.80 across 291 air source systems, so even a heat pump performing at the trial's median comes in well under oil. The SCOP of 3.5 we use is our assumption, between that trial median and the self-selected systems that report on HeatpumpMonitor.org.
The Energy Saving Trust's heat pump page still says that on standard tariffs heat pumps "can cost slightly more to run than new gas or oil boilers". Against oil, today's prices don't bear that out: electricity on the cap is 2.3 times the price of oil per kWh, and a heat pump at the trial median turns each kWh of electricity into 2.8 kWh of heat.
Ofgem's price cap doesn't cover heating oil, only gas and electricity on standard variable tariffs.
A Year's Heating
There's no measured figure for how much oil homes use, the way DESNZ publishes gas use. The Warm Homes Plan says rural homes have a greater proportion of detached houses and bungalows and are typically older and larger. So we use the detached house's heat: DESNZ's median gas use for detached houses in England and Wales, through a 90% boiler, about 12,400 kWh a year. Our estimate, at today's prices:
| Heating | Fuel a year | Saving against oil |
|---|---|---|
| Oil boiler, 85% | £1,650 | |
| Air source, standard rate | £930 | £720 |
| Air source, heat pump tariff | £710 | £940 |
Those are fuel costs only. Oil has no standing charge, and you keep paying your electricity standing charge either way, so neither changes the gap. Your own oil spend is the better starting point: put it in the calculator above.
What Switching Costs
- Air source heat pump: DESNZ's 2025/26 median for the 8kW to 10kW band, which covers the 8.5kW our heat loss model gives a 130 sq m late-1970s detached house, is about £12,700. Less the £9,000 grant, about £3,700.
- Replacement oil boiler: MyJobQuote puts the average replacement at £3,300, with jobs anywhere from £2,200 to £5,500.
- Oil tank: if yours is old or damaged it's often replaced with the boiler; MyJobQuote puts a new bunded tank at £2,200 or more. A heat pump doesn't need one.
- Radiators: some may need upsizing for a heat pump. Our estimate for a larger detached or poorly insulated home is 7 to 12 radiators, £1,050 to £4,800. DESNZ doesn't say whether its costs include radiator work, so treat this as a possible extra.
How Long It Takes to Pay Back
- If the oil boiler needs replacing anyway: the heat pump costs about £400 more than the average oil boiler replacement after the grant, which the £720 a year saving covers in under a year. If it needs radiator work too, the extra is about £1,450 to £5,200, so 2 to 7 years. Avoiding a new tank shortens it.
- If the oil boiler still works: the whole £3,700 comes back in about 5 years on the standard rate, or about 4 on a heat pump tariff, before any radiator work.
Those are at today's prices with no inflation. Air source heat pumps typically last 15 to 20 years, so on these figures they pay back well within their life.
Grants in Each Part of the UK
- England and Wales: the Boiler Upgrade Scheme gives £7,500 towards an air source or ground source heat pump, plus £1,500 until March 2027 if your home is heated by oil or LPG and has no mains gas connection. It's for replacing fossil fuel heating, which gov.uk says includes oil, gas, electric or LPG; you need to own the property, and the installer applies. Of the grants paid to the end of August 2026, 17% replaced oil heating, and in July and August 2026 there were 5,351 applications for the £9,000 grant, 34% of all applications.
- Scotland: Home Energy Scotland offers a grant of up to £7,500 for a heat pump if you own the home and it's your only or main home, plus £1,500 in remote rural and island areas and off-gas accessible rural areas, with an optional interest-free loan of up to £7,500. The heat pump must provide all the home's heating and hot water, replacing an existing heat pump gets a loan but no grant, and funding is first come, first served.
- Northern Ireland: the Boiler Upgrade Scheme doesn't cover Northern Ireland, but its NISEP schemes (Green Heat NI, Toasty Homes) can fully fund a heat pump for lower-income owners. Oil costs about the same there: the Consumer Council's average for 900 litres on 22 October 2026 was £1,024 including VAT, about 113.8p a litre against about 117.1p in BoilerJuice's UK figure. Ofgem's cap rates are for England, Scotland and Wales, and NI electricity is dearer (about 32.1p a kWh on our figures), so the calculator understates NI running costs. If you're paying in full in NI, we'd switch only when the oil boiler is dead anyway and you want off oil for its own sake: with no grant, the extra over a new oil boiler takes longer to pay back than a heat pump lasts. Our Northern Ireland heat pump grants page has the sums.
Our Boiler Upgrade Scheme guide covers how the grant works.
What to Check Before You Switch
- Hot water: a heat pump doesn't give hot water on demand like a combi, so if you have an oil combi you'll need room for a hot water cylinder or a heat battery (Energy Saving Trust).
- Radiators and insulation: heat pumps run at about 35C to 55C, against 70C to 80C from a boiler (British Gas), so some radiators may need to be bigger. Our radiators guide has a checker for each room, and our detached house page shows what filling the cavity does to the size you need.
- Room outside: the outdoor unit needs space and has to meet the noise limit at your neighbours' windows; our noise guide explains the check.
Our View
Our view: if you heat with oil and the boiler is due for replacement, get heat pump quotes before you buy another oil boiler. On today's prices and the £9,000 grant, the sums favour the heat pump more strongly than they do for a home on gas. If your oil boiler is young and working, the case is still good but less urgent; in England and Wales the extra £1,500 ends in March 2027, which is the date to plan around.
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More: Heat pump vs gas boiler calculator | Heat pump running costs | Heat pumps in detached houses
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