The Budget on 28 October 2026 cut £1bn from Warm Homes Plan capital grants to help pay for the Defence Investment Plan. The government says most funding for low-income households and social housing is protected.
What changed
- £1bn less in grants. The money comes out of the capital budget behind the plan’s grant schemes.
- Boiler Upgrade Scheme kept at £400m for 2027-28, then rising broadly with inflation. Analysts say that is around £800m less over three years than previously planned, or roughly 100,000 fewer funded heat pumps.
- VAT relief on solar panels ends. Zero-rated VAT on energy-saving materials for homes, including solar panels, won’t be extended beyond the end of March 2027.
What is protected
The government says most funding for low-income households and social housing delivered through mayors and councils is protected. The Warm Homes Loan Scheme launched the day before the Budget and is open now.
What it means for you
- Thinking about solar? Installs completed before April 2027 still benefit from 0% VAT.
- Thinking about a heat pump? The £7,500 grant continues, and £9,000 for off-gas homes until 31 March 2027. Grant budgets are limited, so earlier applications are safer.
- On a lower income? Check the Warm Homes: Local Grant. Funding runs through councils and can run out locally.
Analysts have also questioned how much of the plan’s headline £15bn remains after changes to loan funding. We’ll update this page as departments publish details.