The UK government has reduced planned funding for the Boiler Upgrade Scheme (BUS) by £200 million ($267 million) for the 2027–28 financial year, a 33.3% cut from the previous allocation. The reduction was confirmed in Budget 2026, published by HM Treasury on 28 October.
The scheme will receive £400 million ($534 million) in 2027–28, compared with the £600 million ($801 million) previously allocated under the Warm Homes Plan. Funding will remain at its 2026–27 level rather than increasing as originally planned. The adjustment forms part of £1 billion ($1.34 billion) in capital-grant savings across the Warm Homes Plan.
Despite the reduction, the government has reaffirmed its commitment to heat pump deployment. Budget 2026 states that funding for the Boiler Upgrade Scheme will increase broadly in line with inflation after 2027–28. The government has also introduced the Warm Homes Loan Scheme to provide additional financing for heat pumps and other clean energy technologies.
The Budget does not announce changes to individual heat pump grant amounts. The reduction applies to the scheme’s total funding allocation rather than the financial assistance available to eligible households.
The lower budget could limit the number of heat pump installations supported by government grants and affect demand forecasts, manufacturers’ sales strategies and investment decisions among installation businesses. The revised funding comes as the UK seeks to expand low-carbon residential heating and reduce reliance on fossil fuels.
