Gas Boiler vs Heat Pump Costs After October 2026 Price Cap
October 2026 Price Cap Makes Gas Heating More Expensive Than It Looks
Gas is driving the October energy-price increase. From 1 October 2026, Ofgem’s headline cap rises 4% to £1,723 a year for a typical dual-fuel household paying by Direct Debit. But the average gas unit rate jumps from 7.33p to 7.97p per kWh, an 8.7% rise, while electricity moves from 26.11p to 26.32p, an increase of only 0.8%. For Scottish homeowners considering an air source heat pump, that difference changes the running-cost calculation (gas boiler vs air source heat pump).
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Gas boiler vs air source heat pump: Gas is rising much faster than electricity
The percentage changes are straightforward:
- Gas: (7.97p – 7.33p) / 7.33p x 100 = 8.7%
- Electricity: (26.32p – 26.11p) / 26.11p x 100 = 0.8%
Gas therefore rises almost eleven times faster than electricity in percentage terms. The average gas standing charge also increases from 29.04p to 29.68p a day, while the electricity standing charge falls from 57.19p to 54.83p. Ofgem explains that electricity has no VAT between 1 October 2026 and 31 March 2027, while gas continues to carry 5% VAT. Get your air source heat pump instant quote.
A fair comparison uses the same amount of useful heat
Ofgem’s typical household now uses 9,500 kWh of gas a year. To model a representative Scottish gas-heated home, assume that gas feeds a modern boiler operating at 90% seasonal efficiency. The useful heat reaching the radiators and hot-water system is:
- 9,500 kWh x 90% = 8,550 kWh of useful heat
The heat pump must provide exactly the same 8,550 kWh. At a Seasonal Coefficient of Performance, or SCOP, of 3.2, it supplies 3.2 units of heat for each unit of electricity. Its annual electricity requirement is:
- 8,550 kWh / 3.2 = 2,672 kWh of electricity
Gas boiler vs air source heat pump: The October cost calculation
Gas boiler: 9,500 kWh x £0.0797 = £757.15 for gas. Add 365 x £0.2968 = £108.33 for the gas standing charge. Total annualised gas-heating cost: £865.48.
Air source heat pump at SCOP 3.2: 2,671.875 kWh x £0.2632 = £703.24. We do not add the electricity standing charge because the household already needs an electricity connection whether it heats with gas or a heat pump. Get air source heat pump instant quote.
Illustrative saving: £865.48 – £703.24 = £162.24 a year, or about £13.52 a month. If the home keeps its gas meter for cooking or another appliance, the gas standing charge remains. On energy alone, the modelled saving is £757.15 – £703.24 = £53.91 a year. Removing gas completely makes the larger saving available.
Why the October change strengthens the heat pump case
At July’s rates, the same model produces an annualised gas cost of £802.35 and heat-pump electricity of £697.63. At October’s rates, the gas figure rises by £63.14, while the heat-pump figure rises by only £5.61. In this like-for-like model, the cap change adds more than eleven times as much to the gas-boiler cost as it adds to the heat-pump cost.
The useful-heat price tells the same story. A 90%-efficient boiler at 7.97p gas costs 7.97p / 0.90 = 8.86p per useful kWh. A heat pump at SCOP 3.2 costs 26.32p / 3.2 = 8.23p per useful kWh. The heat pump is about 7% cheaper before any saving from ending the gas standing charge.
Gas boiler vs air source heat pump: Heat pump performance matters
No responsible installer should promise one saving for every property. Heat-pump performance depends on correct sizing, radiator or underfloor-heating design, flow temperature, insulation, controls, hot-water demand and how the system is used. The table shows the annualised result for the same 8,550 kWh of useful heat.
Gas boiler vs air source heat pump: Where is the break even point
Ignoring standing charges, the heat pump matches a 90%-efficient gas boiler when its SCOP reaches approximately 2.97. The calculation is 0.90 x 26.32p / 7.97p = 2.97. If the gas supply is removed and its £108.33 annual standing charge disappears, the break-even SCOP in this model falls to about 2.60. A well-designed system operating above that point can cost less to run at the October cap rates.
Could your Scottish home make the numbers work
This example is a guide, not a quotation or savings guarantee. Scotland has colder locations, different electricity regions and homes ranging from compact terraces to large rural properties. Your own result needs a room-by-room heat-loss calculation, expected flow temperature and a property-specific SCOP. A suitable smart or time-of-use tariff may reduce costs further, but the saving depends on when electricity is used.
Eligible Scottish homeowners may currently be able to access up to £7,500 towards clean heating through the Home Energy Scotland Grant and Loan scheme, with an additional £1,500 rural uplift in qualifying areas. Funding, eligibility and scheme terms can change, so they should be checked before proceeding.
Gas boiler vs air source heat pump: Find out what a heat pump could cost for your home
The October price cap does not make every heat pump automatically cheaper. It does make an efficient, correctly designed heat pump more attractive compared with gas. Gas is rising sharply, electricity is almost flat, and a heat pump can turn one unit of electricity into around three or more units of useful heat.
Do not rely on a national average to make a decision about your home. Tell Boxergy a few details about your property and energy use to receive a fast, no-obligation indicative estimate and understand what funding may be available.