Heating Cost Calculator (Gas & Electric)

Home Heating Guide

What's the difference between Gas and Heat Pump Running Costs?

Gas boilers burn gas and are approximately 90% efficient. Air source heat pumps move heat rather than generate it, achieving a COP (Coefficient of Performance) of 2.5–4.0 — meaning they deliver 2.5–4 units of heat per unit of electricity used. At current UK prices (gas ~5.5p per kWh, electricity ~25p per kWh), a heat pump with COP 3.0 is equivalent to gas at 8.3p per kWh. This makes heat pumps cheaper to run than gas in well-insulated homes in most of the UK — though the gap is narrow.

What do I need to know about Improving Heating Efficiency?

The order of heating efficiency improvements by cost-effectiveness: 1. Thermostat controls and smart thermostats (£100–300, saves 10–15%). 2. Draught proofing (£50–200, saves 15%). 3. Loft insulation (£300–600 if uninsulated, saves 25%). 4. Cavity wall insulation (£400–800, saves 15%). 5. Solid wall insulation (£5,000–15,000, saves 25–35%). 6. Double glazing (£4,000–10,000, saves 10–15%). Each measure works better in combination with the others.

What do I need to know about Heat Pump Suitability?

Heat pumps work best in well-insulated homes with underfloor heating or upgraded large radiators (they operate at lower flow temperatures than gas boilers — 40–55°C vs 70–80°C). They are less suited to poorly insulated older homes or those with small radiators. The Boiler Upgrade Scheme (2024) offers a £7,500 grant toward a heat pump installation. Running costs are not the only consideration — installation costs £8,000–20,000 compared to £2,500–4,000 for a new boiler.

What should I know about Ofgem Energy Price Cap?

UK residential energy prices are regulated by Ofgem's price cap, which sets maximum unit rates and standing charges each quarter. From Q1 2025, typical household bills target approximately £1,738 per year for a medium household. The price cap covers gas and electricity — gas standing charges of approximately 29.6p per day and electricity approximately 61p per day are included. Check the current rate at ofgem.gov.uk for the most accurate current figures.

What do I need to know about Thermostat Settings and Heating Costs?

The thermostat temperature you set has a surprisingly large effect on annual heating costs, independent of the fuel type or efficiency figures used elsewhere in this calculator. As a widely used rule of thumb, each 1°C reduction in average thermostat setting cuts heating energy use by roughly 8-10% for a typical UK home — meaning even turning the thermostat down by just a degree or two, a change most households barely notice day to day, can meaningfully reduce the annual usage figure this calculator estimates. This is because heat loss through walls, windows and roof increases with the temperature difference between inside and outside, so a smaller difference means slower heat loss and less energy needed to replace it. A programmable or smart thermostat that reduces temperature automatically overnight and while the house is empty during the day captures much of this saving without requiring constant manual adjustment, and can be combined with the insulation saving aspect of this calculator for a more complete picture of where cost reductions can realistically come from. Setting room thermostats and thermostatic radiator valves too high is one of the most common and easily corrected sources of unnecessarily high heating bills.

What should I know about Boiler Flow Temperature and Running Costs?

For gas boiler households, the flow temperature a boiler is set to run at has a significant effect on efficiency that's often overlooked. Most UK gas boilers are installed with a default flow temperature well above what's needed, but modern condensing boilers actually achieve their highest efficiency, meaning more of the gas energy is converted to useful heat rather than lost up the flue, at lower flow temperatures, because condensing boilers extract extra heat from the flue gases only when the returning water is cool enough to trigger condensation inside the heat exchanger. Turning the flow temperature down, a free adjustment most installers can show you, can improve real-world efficiency by several percentage points, directly reducing the annual gas cost this calculator estimates, though it may mean radiators take slightly longer to bring a room up to temperature. For heat pump households, flow temperature matters even more, since heat pump efficiency, reflected in the COP figure used here, drops noticeably as flow temperature rises — heat pumps are specifically designed and most cost-effective when run at low flow temperatures with correctly sized radiators or underfloor heating.

Do Zoning and Smart Thermostats Reduce Heating Costs?

Heating only the rooms actually in use, rather than the whole house uniformly, is one of the more significant ways to reduce heating costs without any change to the boiler or insulation itself. Zoning works by dividing a home's heating into separately controllable areas — commonly upstairs and downstairs as a basic split, or room-by-room with thermostatic radiator valves (TRVs) or smart radiator valves for finer control — allowing less-used rooms like spare bedrooms to be kept cooler while living spaces stay comfortable. Smart thermostats add scheduling and learning capability on top of this, automatically reducing heating during hours the home is typically empty and ramping it back up shortly before people return, rather than relying on a fixed manual schedule that doesn't adapt to actual occupancy patterns. Some smart thermostat systems also use geofencing (detecting via a phone when occupants are approaching home) or occupancy sensors to fine-tune this further. The combined savings from zoning and smart scheduling vary considerably by household — a home with rooms that go largely unused much of the time, or an irregular daily schedule that a smart system can adapt to better than a fixed manual timer, sees more benefit than a small home with consistent, predictable occupancy throughout. Most independent assessments put realistic savings from smart heating controls somewhere in the range of 5-15% of heating costs for a typical household, on top of whatever savings come from the underlying boiler efficiency and insulation.

Annual Heating Cost by Home Size and System (Reference Table)

Running costs vary enormously by home size, insulation standard, and heating system. The figures below are typical UK estimates at a broadly average level of energy prices and insulation — your actual bill could be meaningfully higher or lower depending on how well-insulated and airtight your particular home is.

Worked Example: Gas Boiler vs. Heat Pump for a 3-Bed Semi Suppose a 3-bed semi has an estimated annual heat demand of 12,000 kWh. With a gas boiler running at around 85% efficiency and a gas price of roughly 7p/kWh, the gas actually purchased is 12,000 ÷ 0.85 ≈ 14,118 kWh, costing about 14,118 x £0.07 ≈ £988, plus a standing charge of around £120, for a total of roughly £1,108/year. With an air source heat pump achieving a seasonal COP (coefficient of performance) of 3.2 and an electricity price of roughly 25p/kWh, the electricity needed is 12,000 ÷ 3.2 ≈ 3,750 kWh, costing about 3,750 x £0.25 ≈ £938, plus a standing charge of around £110, for a total of roughly £1,048/year. In this scenario the heat pump is modestly cheaper to run, but the gap narrows or reverses if the COP is lower (older or poorly-sized heat pump) or if the gap between gas and electricity unit prices widens — which is why running-cost comparisons should always be revisited whenever energy prices move.

How Insulation Upgrades Change the Running-Cost Comparison

The gas-vs-heat-pump running cost comparison above assumes a fixed annual heat demand, but that demand itself is not fixed — it depends heavily on the building's insulation standard, and improving insulation shifts the comparison in a heat pump's favour more than it does for a gas boiler. This is because heat pumps run most efficiently (highest COP) when delivering heat at lower flow temperatures over longer periods, which suits a well-insulated, well-sealed home far better than a leaky one requiring short bursts of high-temperature heat. A poorly insulated home that reduces its heat loss by, say, 30% through loft and wall insulation doesn't just cut the heat pump's electricity use by roughly that proportion — it often also allows the heat pump to run at a lower, more efficient flow temperature, improving COP on top of the reduced demand, a compounding effect that doesn't apply in the same way to a gas boiler. This is one reason heating engineers usually recommend addressing a home's insulation and draught-proofing before or alongside installing a heat pump, rather than installing a heat pump into an under-insulated building and hoping running costs come down to expected levels.