Heat pump subsidies face cuts to fund defence spending

Posted: 16th October 2026

Sources have told the Guardian that ministers are preparing to cut hundreds of millions of pounds from a scheme helping households replace gas boilers with electric heat pumps, as the government looks to redirect funding towards defence. The boiler upgrade scheme offers grants of up to £9,000 and has supported nearly 80,000 installations since 2022.

Madeleine Gabriel of the charity Nesta said the UK was in an energy crisis due to its dependence on expensive gas, so cutting funding for heat pumps “makes no sense”. Octopus Energy chief executive Greg Jackson said the funding was stimulating a market that would drive down the cost of heat pumps, and warned that “cutting the engine now would be brutally damaging”.The cuts form part of a wider effort to find £2bn in energy department savings to help fund a planned £15bn increase in defence spending, with carbon capture and green hydrogen programmes also facing reductions.