Energy Guide: UK Energy Grants and Schemes — Free Insulation, Heat Pumps and Bill Help

Before exploring the grants available, it helps to understand exactly what you are paying for. From April 2026, Ofgem's price cap sets the typical dual-fuel household bill at £1,641 per year — a reduction of £117 from the Q1 2026 cap of £1,758. Electricity is charged at 24.67p per kWh with a standing charge of 57.21p per day, while gas costs 5.74p per kWh with a standing charge of 29.09p per day.

The most significant change in the April cap is the sharp fall in social and environmental policy costs, which dropped £130 — from £236 to £106 per year. This reflects the government's decision to shift green levies off household bills and into general taxation. However, network costs rose by £66 (from £397 to £463), partially offsetting the saving. The next cap announcement is due on 27 May 2026 for the July–September quarter.

The chart above illustrates how the cost components have shifted. While wholesale energy costs have eased slightly, the real story is the dramatic reduction in policy costs — and the offsetting rise in network charges as Britain upgrades its energy infrastructure. For households struggling with bills, this breakdown matters because several of the grants described below target the very components that keep costs high: inefficient heating, poor insulation, and outdated boilers.

The Boiler Upgrade Scheme (BUS) provides upfront grants to help homeowners in England and Wales replace fossil fuel heating systems — typically gas or oil boilers — with low-carbon alternatives such as air source heat pumps, ground source heat pumps, or biomass boilers. The scheme is administered by Ofgem and funded by the Department for Energy Security and Net Zero.

To apply, you need to work through an MCS-certified installer, who will handle the application on your behalf. Your property must have a valid Energy Performance Certificate (EPC) and must not be a new build. The grant covers a significant portion of the installation cost, which can otherwise run to £10,000–£15,000 for an air source heat pump. Crucially, the grant is paid directly to the installer — you simply see a reduced quote.

The scheme is part of the government's broader strategy to decarbonise home heating, and take-up has been rising steadily. For households with older, inefficient gas boilers, the combination of a BUS grant and lower running costs from a heat pump can deliver genuine long-term savings — particularly as gas prices remain elevated. If you are considering a replacement, it is worth getting quotes from multiple MCS-certified installers to compare costs after the grant is applied. Further details are available at gov.uk/apply-boiler-upgrade-scheme.

For low-income households, the most impactful support comes through schemes that fund energy efficiency improvements at no cost to the householder. The Warm Homes: Local Grant provides energy efficiency measures and low-carbon heating for low-income households in England, delivered through local authorities. This can include loft insulation, cavity wall insulation, draught-proofing, and in some cases, replacement heating systems. Eligibility is typically linked to household income and the energy efficiency rating of your property.

Alongside this, the Warm Homes: Social Housing Fund (Wave 3) has allocated £1.29 billion for the period 2025–2028 to upgrade social housing stock to at least EPC Band C. If you are a social housing tenant, your landlord or housing association may be able to access this funding to improve your home's insulation and heating — reducing your bills without any cost to you. It is worth asking your housing provider whether they are participating in the scheme.

The Energy Company Obligation (ECO) requires large energy suppliers to fund energy-saving improvements in eligible households. The measures available vary between suppliers, but can include boiler replacements, insulation, and heating controls. If you receive certain means-tested benefits or live in a property with a low EPC rating — details at GOV.UK (gov.uk/find-energy-certificate), you may qualify. Contact your energy supplier directly to ask what ECO support they offer. Separately, the Great British Insulation Scheme offered free or subsidised insulation to qualifying households — however, the application service has now closed. Some energy suppliers are still accepting applications for a limited period, but all installations must be completed by 31 March 2026. If you believe you may be eligible, contact your supplier urgently as the window is closing.

The Warm Home Discount Scheme provides a one-off £150 discount applied directly to your electricity bill each winter. Unlike many other support schemes, most eligible recipients in England and Wales do not need to apply — the discount is applied automatically by your energy supplier based on data shared with the Department for Work and Pensions.

You are eligible if you receive the Guarantee Credit element of Pension Credit, or if you are on a low income and meet certain criteria set by your energy supplier. The scheme covers England, Wales and Scotland but is not available in Northern Ireland. In Scotland, the process is slightly different: you must apply directly through your energy supplier rather than receiving the discount automatically. Check with your supplier if you are unsure whether you qualify.

The £150 may seem modest against an annual bill of £1,641, but for pensioners and low-income households it represents a meaningful reduction — roughly equivalent to a month's worth of gas heating during the colder months. If you think you should be receiving the discount but have not seen it applied, contact your energy supplier. It is also worth checking whether you are entitled to Pension Credit itself, as many eligible pensioners fail to claim it, missing out on both the credit and the linked Warm Home Discount.

For a deeper look at this area, read our guide to Winter Fuel Payment 2025/26.

Related reading: savings guide.

With multiple schemes running simultaneously, each with different eligibility criteria and application routes, it is easy to miss support you are entitled to. Start by checking whether you qualify for the Warm Home Discount — if you receive Pension Credit or are on a low income, this £150 saving should be applied automatically, but it is worth confirming with your supplier. In Scotland, remember that you need to apply proactively.

Next, consider your home's energy efficiency. If your property has an EPC rating of D or below, you are likely eligible for support through ECO or the Warm Homes: Local Grant. Contact your local authority and your energy supplier to ask what is available — the measures could include free insulation that pays for itself many times over through lower bills. For the Great British Insulation Scheme specifically, act immediately if you want to take advantage, as the deadline for completed installations is 31 March 2026.

For homeowners considering longer-term improvements, the Boiler Upgrade Scheme makes heat pump installation significantly more affordable. Combined with falling electricity prices under the new cap — electricity is now 24.67p/kWh — the economics of switching from gas to a heat pump are improving. If you are also looking to reduce your overall tax burden to free up money for energy improvements, it is worth reviewing your ISA allowance and savings options to ensure your money is working as hard as possible. The personal allowance remains frozen at £12,570 and the basic rate band at £37,700, meaning fiscal drag continues to erode take-home pay for many workers — making every available saving and grant all the more valuable.

This article is for informational purposes only and does not constitute regulated financial advice. For personalised advice on your financial situation, consult a qualified financial adviser.

For a deeper look at this area, read our guide to UK Energy Bills Explained.