Government’s Low-Carbon Heating Scheme: Updates and Speculation Ahead of the November 2025 Budget

With the Autumn budget next week, there have already been primary changes to the Boiler Upgrade Scheme with the expansion of eligible technologies to include air to air heat pumps and heater batteries.

However, there is speculation that the government may announce cuts to the overall funding for the scheme or restructure it to focus on lower-income households.

The low-carbon heating scheme has seen major changes in 2025, giving households more choice and flexibility in adopting greener technologies.

The grant will now include air-to-air heat pumps from 2026 up to £2,500 (that can provide heating and cooling) and heater batteries by 2027, broadening the range of low-carbon solutions available to homeowners.

The scheme’s budget rose by £30 million in 2024/25, with a confirmed allocation of £295 million for 2025/26 — nearly double the previous year’s funding.

In England & Wales, air source heat pumps no longer need to be installed at least one metre from property boundaries, making installations easier for more households. Loft and cavity wall insulation are no longer mandatory, but still recommended for improved efficiency.

At BSE|FM, we have a knowledgeable team of engineers and installers who can help with any query you have, and give impartial advice, so you can take the next step in what is right for your home.

Reports suggest billions could be removed from future allocations, with resources redirected to other energy bill reduction measures. The scheme may be reshaped to focus primarily on lower-income households, potentially reducing universal grant levels or tightening eligibility criteria.

Don’t hesitate to contact our team now for any concerns you may have or you just want to have a chat and see how we can help you.