How Much Does a Heat Pump Save Per Year?

The annual savings depend almost entirely on what you are replacing. Switch from electric heating: save £800-£1,200+. From LPG: save £500-£1,200. From oil: save £500-£1,200. From gas: save £200-£500 with a TOU tariff -- or roughly break even on a standard tariff. Here are the real numbers.

By Home Heat Pump Guide Published: 18 March 2026 13 min read

Before and after energy cost comparison showing annual savings from switching to a heat pump in the UK — Annual savings vary dramatically by fuel type -- electric and LPG users see the biggest returns

Using a baseline of 12,000 kWh annual heat demand (typical 3-bed semi) and COP 3.0. For full running cost data, see our running costs guide. For installation costs, see our cost guide.

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Savings vs Gas Boiler

At standard rates: just £19/year. With TOU tariff + gas standing charge saved: £396-£499/year. The case for switching from gas rests on the BUS grant, avoided boiler costs, and future price trends. See our heat pump vs gas boiler comparison.

Savings vs Oil Boiler

Oil users save £500-£1,200/year with a TOU tariff, depending on oil price volatility. They also eliminate delivery hassles and tank maintenance.

Savings vs LPG Boiler

LPG users are among the biggest winners: £500-£1,200/year. See our dedicated LPG comparison.

Savings vs Electric Heating

The biggest savings opportunity: £800-£1,200+ per year. See our detailed electric heating comparison.

Savings Summary

Annual Savings by Fuel Type (12,000 kWh, 3-bed semi)

From electric heating£800-£1,200+

From LPG£500-£1,200

From oil£500-£1,200

From gas (with TOU)£200-£500

UK homeowner calculating annual heat pump savings compared to current gas, oil, or LPG heating bills — The savings calculation is straightforward: current annual cost minus heat pump annual cost equals your saving

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Installation cost / annual saving = payback years.

Factors That Increase Your Savings

TOU electricity tariff: 20-35% reduction in running costs
Higher COP through good installation: COP 3.5 saves 14% more than COP 3.0. See our installation guide
Larger properties: Greater absolute savings
Solar panels: Adding solar offsets 15-25% of heat pump electricity

UK home with heat pump in spring garden representing ongoing annual savings from efficient heating — Annual savings compound over the 20-year lifespan of the heat pump, with the potential to increase as energy policies evolve

Will Savings Increase Over Time?

Energy levy rebalancing, declining North Sea gas, possible carbon pricing, and improving heat pump technology all suggest savings will grow. For the full long-term picture, see whether heat pumps are worth it.

Comfortable UK family home benefiting from annual heat pump savings and consistent warmth — Beyond the pounds saved, heat pump owners consistently report improved comfort and control

Frequently Asked Questions

Will I definitely save money with a heat pump?

From oil, LPG, or electric: almost certainly. From gas: depends on COP and tariff.

How much will I save switching from oil?

£500-£1,200/year for a typical 3-bed home.

Do savings account for installation cost?

No -- these are running cost savings only. Divide net cost by annual saving for payback.

How much do owners actually save in practice?

Energy Saving Trust data shows gas switchers save £200-£400/year; oil switchers save £400-£800/year.

Will the government make heat pumps cheaper to run?

The stated policy is to rebalance levies from electricity to gas. Timeline uncertain.

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About this guide: This article quantifies the annual savings from heat pump installations across all UK fuel types. Savings are highest when replacing electric, LPG, or oil heating. The BUS grant reduces the upfront investment, improving the payback calculation. Combining with solar panels further increases annual savings.