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ECO4 scheme explained: free heat pumps and home improvements for UK homes (2026)

Last updated 2026-09-03

The ECO4 scheme is one of the most generous energy efficiency programmes in the UK. Designed to help low-income households and vulnerable residents cut their energy bills, it can cover 100% of the cost of major home upgrades—including a free heat pump, full loft or wall insulation, and modern heating controls.

Unlike standard partial subsidies where homeowners pay the remaining balance, an ECO4 grant can fund a complete "whole-house retrofit" at zero cost to qualifying householders. Here is our complete 2026 guide explaining how the ECO4 scheme works, who qualifies, what measures are covered, and how to apply.

What is the ECO4 scheme?

ECO4 stands for the fourth phase of the Energy Company Obligation. It is a UK government policy administered by Ofgem that places a statutory duty on major energy suppliers—such as British Gas, E.ON Next, EDF Energy, Octopus Energy, OVO Energy, and ScottishPower—to deliver carbon-reduction measures to UK homes.

Key features of the scheme include:

• Runs until March 2027: The current ECO4 phase began in 2022 and runs through to 31 March 2027.
• Fully funded by energy suppliers: The big energy companies fund the installations out of their statutory obligation targets. You do not pay government tax or direct fees.
• Whole-house retrofit approach: Rather than just swapping a single appliance, ECO4 assesses the entire property to improve its overall Energy Performance Certificate (EPC) rating.
• Nationwide coverage: ECO4 applies across England, Scotland, and Wales.

ECO4 sits alongside other national initiatives in our overview of UK government heat pump grants, but stands out because it targets total cost coverage for households that need financial support most.

Who qualifies for an ECO4 grant?

To receive ECO4 funding, your household must meet specific eligibility rules. There are two primary routes to qualify: the Benefits Route and the LA Flex Route.

1. The Benefits Route

You automatically meet the income eligibility criteria if anyone living in the household receives at least one of the following means-tested government benefits:

• Universal Credit (UC)
• Pension Credit (both Guarantee Credit and Savings Credit) — read our dedicated guide on heat pump grants for pensioners for details on Pension Credit entitlements
• Child Tax Credit (CTC)
• Working Tax Credit (WTC)
• Income Support (IS)
• Income-based Jobseeker's Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Housing Benefit
• Child Benefit (subject to household income caps based on whether you are a single parent or couple and the number of dependent children)

2. The LA Flex Route (Local Authority Flexible Eligibility)

What if you do not receive any of the qualifying benefits listed above? You may still qualify through LA Flex. Under this route, local councils can refer low-income or vulnerable residents to energy suppliers for ECO4 funding. Up to 50% of all ECO4 measures can be delivered via LA Flex.

Households typically qualify for LA Flex under one of four criteria:

1. Low Household Income: Gross annual household income is under £31,000.
2. Deprived Areas: Living in a neighborhood classified within bands 1–3 of the English Indices of Multiple Deprivation (or Scottish/Welsh equivalent).
3. Health Conditions: A household member suffers from a long-term health condition exacerbated by living in a cold, damp home (e.g., severe asthma, chronic bronchitis, cardiovascular disease, or limited physical mobility), supported by an NHS or GP referral.
4. Fuel Poverty & Debt: Households experiencing severe fuel poverty or holding significant utility bill debt.

What home upgrades are funded under ECO4?

ECO4 focuses on multi-measure energy efficiency improvements designed to drastically lower home heating demand. Depending on your property survey, an ECO4 retrofit package can include:

In rare instances where a property cannot accommodate a heat pump, a free boiler grant may cover an efficient gas boiler replacement under strict broken boiler rules for low-income owner-occupiers. However, the vast majority of ECO4 heating funds are directed toward zero-carbon heat pumps.

Property EPC ratings and tenant rules

Property EPC Requirements

ECO4 specifically targets inefficient UK housing stock. To qualify for major heating upgrades like a heat pump, your home must generally have an Energy Performance Certificate (EPC) rating of E, F, or G.

The scheme enforces a strict minimum EPC uplift requirement:

• Homes rated EPC Band E or F must be upgraded to at least Band D or C upon completion.
• Homes rated EPC Band G must be upgraded to at least Band D.

Tenant & Landlord Rules

ECO4 is not restricted to homeowners:

• Owner-Occupiers: Eligible for all measures including insulation, heat pumps, solar PV, and first-time central heating.
• Private Renters: Eligible if the tenant meets benefits or LA Flex criteria, provided the private landlord gives written consent. Landlords gain free property upgrades that boost value and satisfy minimum energy efficiency standards (MEES).
• Social Housing Tenants: Properties rated EPC E, F, or G in social housing can receive ECO4 funding for specific insulation and low-carbon heating installations.

ECO4 vs. the Boiler Upgrade Scheme (BUS)

If you are researching UK heating grants, you have likely come across both ECO4 and the Boiler Upgrade Scheme. While both schemes support heat pump adoption, they operate very differently.

For full details on the £7,500 voucher alternative, visit our Boiler Upgrade Scheme guide. Here is how the two compare:

• Funding Level: ECO4 can be 100% free with no upfront cost. BUS provides a fixed £7,500 grant towards an air source or ground source heat pump, leaving the homeowner to pay any remaining balance.
• Means Testing: ECO4 is strictly income and benefit-tested (or qualified via LA Flex). BUS is non-means-tested and available to all property owners in England and Wales regardless of earnings.
• Property Scope: ECO4 requires a multi-measure retrofit (insulation plus heat pump) targeting low-efficiency homes (EPC E/F/G). BUS focuses on replacing fossil-fuel boilers with a heat pump; as of 2026, BUS no longer requires an EPC insulation check.
• Out-of-Pocket Expenses: Unsubsidised heat pump installations can cost anywhere from £8,000 to £14,000. You can review typical installation expenses in our guide on how much a heat pump costs in the UK. Under BUS, homeowners pay the net balance after deducting £7,500. Under ECO4, eligible households pay nothing.

UK Heat Pump Grant Comparison (2026)

Depending on where you live in the UK and your household income, different grant schemes may offer the best pathway to a heat pump installation:

The Great British Insulation Scheme (ECO+) and Future Schemes

In addition to ECO4, the UK government runs the Great British Insulation Scheme (GBIS), formerly known as ECO+. GBIS runs alongside ECO4 until March 2027 but focuses on single insulation measures (such as loft or cavity wall insulation) for a broader cross-section of homes in Council Tax bands A–D in England (A–E in Scotland and Wales) with an EPC of D or lower, regardless of benefit status.

What happens after March 2027?
ECO4 is legally mandated to run until 31 March 2027. The government is expected to launch successor energy-efficiency frameworks to maintain progress toward the UK's legal 2050 Net Zero target. However, energy suppliers operate under annual quota targets—meaning applying early ensures funding availability before regional installer budgets are committed.

How to apply for the ECO4 scheme

Applying for an ECO4 grant does not involve filling out complex government forms yourself. Here is the step-by-step process:

1. Check Your Household Eligibility: Confirm that someone in your home receives a qualifying benefit or that your household meets local council LA Flex income (<£31,000/year) or medical rules.
2. Contact an Energy Supplier or PAS 2035 Retrofit Installer: Reach out to an obligated energy supplier (such as British Gas, E.ON Next, EDF Energy, Octopus Energy, OVO Energy, or ScottishPower) or a TrustMark-accredited installer. You do not need to be an existing energy customer of the supplier that funds your retrofit.
3. Book a Free Home Assessment: A qualified Retrofit Assessor will visit your property to evaluate your EPC rating, perform room-by-room heat-loss calculations, and design a compliant multi-measure package.
4. Installation at Zero Cost: TrustMark-registered installers fit the agreed upgrades—including insulation, your new heat pump, and heating controls—and issue all warranty and MCS certificates.

Frequently asked questions

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