What a Boiler Upgrade Scheme cut would actually cut

Written before the 28 October Budget, on 22 October 2026.

Disclosure: HeatLens builds assessment software for the heat pump installers who deliver the Boiler Upgrade Scheme. The scheme's health is a commercial interest of ours, and this piece is written to be checkable rather than persuasive. The sources, and their limits, are listed at the end.

Since the Guardian reported on 12 October that ministers were preparing to cut the Boiler Upgrade Scheme to help pay for defence spending, the sector has been arguing about one word, "cut", while quoting several different numbers. £7,500. £400m. £143.6m. £2.7bn. They are not versions of the same thing. They are four different layers of the scheme, and only some of them can be touched by a budget decision.

Everything reported so far rests on unnamed sources. The Treasury declined to comment, and as of today, 22 October, the grant values on Ofgem's and GOV.UK's own pages are unchanged. Nothing is confirmed until the Budget lands on Wednesday 28 October. What follows is how the money actually works, so that whatever is announced can be checked against it.

The number on the quote

The number a household actually sees is the grant value. On Ofgem's scheme pages this week it is:

• £9,000 towards an air-to-water or ground source heat pump in off-gas-grid homes now heated by oil or LPG, with no mains gas connection, for applications until 31 March 2027
• £7,500 towards an air source (air-to-water), ground source or water source heat pump
• £5,000 towards a biomass boiler, only in rural, off-gas-grid homes
• £2,500 towards an air-to-air heat pump, residential properties only

Air-to-air heat pumps became eligible, and the scheme was extended to March 2030, by the 2026 amendment regulations, in force from 28 April 2026. The £9,000 off-gas uplift applies to applications made from 21 July 2026 to 31 March 2027.

The scheme is installer-led: an MCS certified installer applies to Ofgem for the voucher and deducts the grant from the customer's quote. Across the scheme's whole life, £687,450,500 has been paid out against 96,611 redeemed vouchers, which averages about £7,100 per grant, a derived figure, since the value varies by technology.

The values are set by the Secretary of State under the scheme's regulations, not written into them. To change one, the government must publish a grant change notice at least 28 days before the new value takes effect. A cut to the scheme's budget and a cut to the grant value are two different decisions, made under two different mechanisms, and only the first of them has been reported. The 12 October report describes cutting "hundreds of millions of pounds" from a five-year funding envelope, not reducing the grant on a quote.

The money that has actually moved

Ofgem's monthly scheme update, updated on 13 October 2026 with figures to 30 September 2026, shows the scheme's second layer: what has actually been paid, by scheme year.

Since applications opened on 23 May 2022, 160,874 voucher applications have been received, 106,185 vouchers worth £763,205,500 have been issued, and 96,611 have been redeemed. Spending per scheme year:

• Year 1 (23 May 2022 to 31 March 2023): £50,009,000
• Year 2 (to 31 March 2024): £88,330,500
• Year 3 (to 31 March 2025): £188,762,500
• Year 4 (1 April 2025 to 31 March 2026): £232,255,000

Demand has grown with every year: Ofgem's annual report for Scheme Year 4 records 45,880 applications, up 19% on Year 3.

Subtracting the four published year totals from the scheme total shows roughly £128m paid out in the first six months of Year 5, a derived figure. That is about £21m a month, around a tenth faster than Year 4's average of about £19m.

The money that hasn't

The third layer is the allocation. In April 2026 the Secretary of State approved £400 million for the Boiler Upgrade Scheme for 2026 to 2027, published on GOV.UK (1 April 2026), the largest annual allocation since the scheme launched. The early years were leaner: £450m covered the initial three-year launch, and £1.5bn was added in December 2023 to carry the scheme to 2028 before the April 2026 extension to 2030.

Ofgem's £143.6m is what was left on 30 September after grants already paid and money held for issued vouchers and applications still being checked. It changes as vouchers expire or are returned. By our arithmetic, about £256m of the year's £400m had been paid or committed in six months.

The five-year number in the headlines

The fourth layer is the one the reporting is actually about. The Guardian's 12 October article, amended the next day, describes the scheme's £2.7bn as a five-year budget, not one year. That budget runs from 2025/26 to 2029/30, averaging about £540m a year and rising from £295m to £709m. The Telegraph and the FT carry the same framing: a £2.7bn scheme, providing £7,500 grants, will be curtailed.

DESNZ's business case for the scheme sets out the year-by-year budgets: £295m, £400m, £600m, £683m and £709m. Two of those years are already set, so a cut of hundreds of millions would most likely land on 2027/28 to 2029/30, which together hold £1,992m, and possibly on the newer grant types: the £2,500 air-to-air grant, open since April, and heat battery grants planned during 2026/27. Unless the Budget touches the current year, the money left to cut in 2026/27 is at most the £143.6m Ofgem showed as uncommitted on 30 September, and that figure falls as new vouchers are issued.

The awkward timing

The reports land on the scheme's strongest demand since launch. DESNZ's monthly statistics record 8,150 applications in July 2026, up 112% on July 2025 and the scheme's best month ever, and about 7,500 in August, the second best, with a record 3,238 grants paid for air-to-water heat pumps in August, up 40% year on year.

Applications are not installations, and we have written separately about how the scheme's different datasets count different things. But as a measure of customer intent, a scheme being cut is, so far, a scheme being applied to at record rates.

It is also worth being precise about the argument the sector is making. Those arguing against a cut say that removing the grant now would stall the market. They lean on DESNZ's own 2026 evaluation, which estimates that 74% of installations the scheme funded in 2022 to 2025 would not otherwise have happened, and on the electricity-to-gas price ratio. The argument is an advocacy position; the 74% is the department's estimate.

And an apparent contradiction resolves itself once the four layers are separated: a government can extend the scheme, add technologies and budget £400m for the year in April, then seek to trim the following years in October. Expansion lives in the regulations; the cut being reported lives in the spending envelope. Different levers.

For households seeing "act before 28 October" marketing: there is nothing to panic-buy. If a grant value changes, the government must publish the new value at least 28 days before it takes effect.

What to watch on the day

When the Budget lands, four separate checks tell you what actually happened:

1. Does the £7,500 change? The only way the grant on a quote moves. Keep an eye on the GOV.UK "what you can get" page, which is updated when values change.
2. Which years' allocations fall? A cut to the years after 2026/27 is the outcome most consistent with the reporting.
3. Does the window move? The scheme currently runs to 2030 under the April 2026 extension. A shortened window is a third lever.
4. Is anything replacing grant money? A Treasury-backed, low-cost green loan scheme has been reported as weeks away; loans can substitute for grants for some households, but they are debt, and unconfirmed.

The Boiler Upgrade Scheme is four numbers doing four different jobs: a value on a quote, a spend trajectory, a year's allocation and a multi-year envelope. Whatever is announced on 28 October, the checkable question is which of the four actually changed.

Sources and limitations

• Ofgem, BUS monthly scheme update (updated 13 October 2026, figures to 30 September 2026): all scheme-wide totals, year-by-year spend rows and the remaining Year 5 budget, including its dynamic-value caveat. Read in full this session. Year 5 spend to 30 September and the average grant per voucher are derived from these published rows and labelled as such.
• Ofgem, Boiler Upgrade Scheme pages (read 22 October 2026) and GOV.UK, Apply for the Boiler Upgrade Scheme: what you can get: current grant values, the off-gas-grid uplift condition and its March 2027 wording, and the split of responsibilities (DESNZ sets budget, allocations and grant values; Ofgem administers).
• Approval to increase the budget for the Boiler Upgrade Scheme, April 2026 (GOV.UK): the £400m allocation for 2026 to 2027. The 2026 amendment regulations (in force 28 April 2026). The funding history: £450m initial, and £1.5bn added in December 2023 to 2028 (GOV.UK announcement, 18 December 2023).
• DESNZ, Boiler Upgrade Scheme business case, Table 1: the year-by-year budgets from 2025/26 to 2029/30.
• DESNZ, Boiler Upgrade Scheme evaluation, 2026: the 74% estimate of installations that would not otherwise have happened.
• Ofgem, BUS Annual Report, April 2025 to March 2026 (published 31 July 2026): 45,880 Scheme Year 4 applications, up 19% on Year 3. Note the annual report's grants-paid figure for Year 4 (£233.1m) differs slightly from the monthly update's year-spend row (£232.3m), a basis difference between the two publications.
• DESNZ, Boiler Upgrade Scheme statistics, August 2026: the July record (8,150, +112% year on year) and August figures (about 7,500 applications; a record 3,238 grants paid for air-to-water heat pumps, +40%). Monthly figures may be revised.
• The Guardian, 12 October 2026, amended 13 October 2026; The Telegraph and the Financial Times, 12 October 2026: the cut reports. All rest on unnamed sources; the Treasury declined to comment; the £2.7bn five-year basis comes from the Guardian's amendment. Treat as unconfirmed until the Budget.
• The i Paper, 18-19 October 2026: the reported Treasury-backed loan scheme. An unconfirmed exclusive.