Home Upgrade Grant (HUG2): Closed, and What Replaced It
The short answer
- Closed in March 2025, so apply for its replacement, the Warm Homes: Local Grant, through your council instead
- Under £36,000 gross household income, a listed benefit or an eligible postcode qualifies for that grant, in homes rated D to G
- Nothing to pay for owner occupiers: it covers insulation, solar panels, smart controls and a heat pump where suitable
The Home Upgrade Grant funded insulation and low carbon heating for low-income households in homes not connected to the mains gas grid in England. Phase 2 had up to £630 million, was delivered by councils from 2023 until March 2025, and upgraded 11,900 homes with 22,000 measures. Unlike ECO4, which energy suppliers fund, HUG2 was funded by the government. Costs were capped per home and averaged across each council's project, so no household was entitled to a fixed sum. Its replacement, the Warm Homes: Local Grant, is open now in England, and it covers homes on the gas grid as well as off it.
Who qualified for HUG2?
Off gas grid homes in England rated D, E, F or G, in a council area taking part. The household needed income within £36,000 gross from April 2024, a means-tested benefit or an eligible low income postcode.
| Requirement | Detail |
|---|---|
| Gas grid status | Off the gas grid (not heated by mains gas) |
| EPC rating | D, E, F, or G |
| Household income | £36,000 gross from April 2024 (£31,000 before), or a means-tested benefit, or an eligible low income postcode |
| Property type | Owner-occupied or rented; private landlords paid at least a third of the cost, social landlords at least half |
| Location | A council area taking part in HUG2 |
Read the detail
HUG2 rules as they stood when it closed, from the DESNZ delivery guidance updated in April 2024. Councils could also use an after housing costs measure of income.
Use our grant eligibility checker to see whether you qualify for the Warm Homes: Local Grant, ECO4, or both.
What did HUG2 cover?
Insulation, air source heat pumps, solar panels and smaller measures, chosen by a retrofit coordinator for the whole house. The Warm Homes: Local Grant works the same way, with a £16,600 per-home cap for low carbon heating.
| Measure | Typical cost if you paid | Typical saving |
|---|---|---|
| Loft insulation (270mm) | About £750 for a bare loft, £600 to top up | 3.2% less heating fuel (measured median) |
| Cavity wall insulation | About £2,200 | 12.0% less heating fuel (measured median) |
| Solid wall insulation (external or internal) | About £15,000 external or £12,000 internal, 3-bed semi | 17.3% less heating fuel (measured median) |
| Underfloor insulation | Quoted after survey | About £55 a year for a semi (Energy Saving Trust) |
| Air source heat pump | £11,000 to £15,500, 3-bed semi | £650 a year against an oil boiler, 3-bed semi on a heat pump tariff |
| Solar PV panels | Quoted after survey | 12.2% less electricity bought (measured median) |
| Windows and doors, draught-proofing, heating controls | Quoted after survey | Not measured separately |
Read the detail
The data behind this table
Measured savings are the median change in homes that had the measure, from DESNZ NEED Impact of Measures 2026; the insulation figures were measured in gas heated homes. They are what homes like yours typically saw, not the most you could save. Insulation costs from the Energy Saving Trust, 2026. Heat pump cost from Boiler Upgrade Scheme installs (DESNZ, August 2026) and saving from our heat model. Actual measures depend on your property assessment.
HUG2 used a whole-house approach, and the Warm Homes: Local Grant does the same. A retrofit coordinator assesses your property and designs a package of measures tailored to your home, so you do not choose individual measures.
Heat pumps are funded
Like HUG2, the Warm Homes: Local Grant can fund an air source heat pump where suitable, on or off the gas grid, with a per-home cap of £16,600 for low carbon heating averaged across the council's project. If you currently heat with oil or LPG, a heat pump ends your fuel deliveries. See our heat pump running costs guide for the savings comparison.
How do you apply now?
HUG2 is closed, so apply for the Warm Homes: Local Grant through GOV.UK or your council's website. The council usually contacts you within 10 working days to arrange a survey, and owner occupiers pay nothing.
Read the detail
HUG2 is closed, so these are the steps for its replacement, the Warm Homes: Local Grant.
Step 1: Apply through GOV.UK or your council's website. 271 councils took part, over 97% of those eligible in England, though funding can run out locally. If yours has none left, you may still qualify for ECO4 or the Boiler Upgrade Scheme. The GOV.UK helpline for the online service is 0800 098 7950.
Step 2: The council usually contacts you within 10 working days to get more information and arrange a home survey. It checks your income, benefits or postcode, and the home's EPC.
Step 3: A qualified retrofit assessor visits your home and records everything needed for the whole-house plan: insulation levels, heating system, windows, ventilation, and building fabric.
Step 4: A retrofit coordinator designs your improvement package and arranges installation through the council's approved contractor network. All work must meet PAS 2035 quality standards and be delivered by TrustMark-registered installers.
Step 5: Installation happens. If you own the home you live in, you pay nothing. If you rent, the landlord gets one home fully funded and pays half the cost of any others.
Step 6: A new EPC is produced showing your improved rating. The retrofit coordinator signs off the work and provides a handover pack with warranties and documentation.
Check for scams
The Warm Homes: Local Grant, like HUG2 before it, is delivered through your local council. Anyone still offering you HUG2 is out of date at best. Never pay money for an assessment or application. If someone contacts you offering "free government insulation" and asks for a fee, it is a scam. Verify any approach through your council's website.
How does HUG2 compare with ECO4 and BUS?
HUG2 is closed, but the Warm Homes: Local Grant, ECO4 and the Boiler Upgrade Scheme are open. ECO4 runs to 31 December 2026, BUS gives £7,500 towards a heat pump, and schemes combine if not for the same measure.
| Feature | HUG2 (closed) | Warm Homes: Local Grant | ECO4 | BUS |
|---|---|---|---|---|
| Status | Closed March 2025 | Open, delivery to 31 March 2028 | Open to 31 December 2026 | Open to 2030 |
| Funding source | Government (via councils) | Government (via councils) | Energy suppliers | Government (via Ofgem) |
| How much | Per-home caps averaged across a project | Caps of £16,600 for energy performance and £16,600 for low carbon heating, averaged | No fixed amount | £7,500 (£9,000 for oil or LPG homes until 31 March 2027) |
| Gas grid homes | No | Yes | Yes | Yes |
| Off-gas homes | Yes (only target) | Yes | Yes | Yes |
| Income requirement | £36,000, a benefit or a postcode | Under £36,000, a benefit or a postcode | Qualifying benefit, or council referral | None |
| EPC requirement | D, E, F, or G | D, E, F, or G | D to G if you own, E to G if you rent | None |
| Includes heat pumps | Yes | Yes | In some homes | Yes (primary purpose) |
| Includes solar | Yes | Yes | In some homes | No |
Read the detail
The data behind this table
You can combine schemes in the same home, but not for the same measure. For example, the Warm Homes: Local Grant for insulation and solar, plus the BUS for a heat pump.
Read our full guides: ECO4 Scheme Explained and Boiler Upgrade Scheme Guide. Use our grant eligibility checker to see which schemes you qualify for.
What does heating an off-gas home cost?
£1,316 a year with oil, £1,106 with LPG and £1,752 with storage heaters, for a 3-bed semi. A heat pump on a heat pump tariff costs £666, saving £650 a year against oil.
| Heating system | Annual cost (3-bed semi) | Annual cost with heat pump | Saving |
|---|---|---|---|
| Oil boiler | £1,316 | £666 (HP tariff) | £650 |
| LPG boiler | £1,106 | £666 (HP tariff) | £440 |
| Electric storage heaters (Economy 7) | £1,752 | £666 (HP tariff) | £1,086 |
| Electric boiler | £2,606 | £666 (HP tariff) | £1,940 |
Read the detail
If you are off the gas grid, you are likely paying significantly more for heating than gas-connected homes. Here is how common off-gas heating systems compare.
The data behind this table
9,900 kWh delivered heat, the shared model figure for a 3-bed semi at EPC band D. Oil and LPG boilers at 85% seasonal efficiency, so 11,647 kWh of fuel. Oil at 11.3p per kWh, the BoilerJuice UK average of 116.20p a litre on 25 September 2026; oil prices move, so an oil bill moves with them. LPG at 9.5p/kWh, our assumption. Electricity at 26.32p/kWh (Ofgem price cap, October to December 2026). Heat pump at the measured median efficiency of 2.78 on a heat pump tariff such as Cosy Octopus, about 18.7p per kWh with most heating in the cheap hours; on a standard tariff it would cost £937. Storage heaters are priced on Economy 7 as in our storage heaters guide, with 80% of the heat at the night rate, about 17.7p per kWh of heat; an electric boiler at the single rate of 26.32p. Standing charges excluded.
Off-gas homes save the most by switching to a heat pump. If a grant covers the installation, the saving is yours from the first bill, and with the Boiler Upgrade Scheme's £9,000 for oil and LPG homes a typical 3-bed semi pays £2,000 to £6,500 for the whole job. Read our electric boiler vs heat pump guide for the detailed comparison.
Frequently asked questions
What was the Home Upgrade Grant?
A government scheme, run by councils in England, that funded insulation and low carbon heating for low-income households in off gas grid homes rated D to G. Phase 2 had up to £630 million and closed in March 2025, having upgraded 11,900 homes. The Warm Homes: Local Grant replaced it and covers homes on and off the gas grid.
Who qualified for HUG2?
Off gas grid homes in England rated D to G, in a council area taking part, where the household had a gross income of up to £36,000 (£31,000 before April 2024), claimed a means-tested benefit, or lived in an eligible low income postcode. Owner occupiers and tenants could apply; private landlords paid at least a third of the cost, and social landlords at least half.
Is the Home Upgrade Grant still open?
No. HUG2 closed in March 2025 and GOV.UK now points to the Warm Homes: Local Grant instead. That is open in England through councils until 31 March 2028 for households with income below £36,000, on a listed benefit or in an eligible postcode, in homes rated D to G. Use our grant checker.
What does the Warm Homes: Local Grant cover?
Insulation, solar panels, smart controls and an air source heat pump where suitable, chosen after a home survey. Owner occupiers pay nothing. Per-home cost caps of £16,600 for energy performance measures and £16,600 for low carbon heating apply, averaged across each council's project, so they are not an amount any household is entitled to.
How do I apply now?
Apply for the Warm Homes: Local Grant through GOV.UK or your council's website. The council usually contacts you within 10 working days to arrange a home survey. Use our grant checker first.
Data sources
HUG2 rules and delivery figures come from GOV.UK and the DESNZ HUG statistics. Measured savings come from DESNZ NEED, energy prices from the Ofgem price cap and heating oil from BoilerJuice.
Show every source
HUG2 rules from GOV.UK (guidance for local authorities and the April 2024 delivery update). Delivery figures from the DESNZ HUG statistics, November 2025. Warm Homes: Local Grant rules from GOV.UK and the policy guidance, July 2026. Measured savings from DESNZ NEED Impact of Measures 2026. Heating costs from our heat demand model, fitted to DESNZ National Energy Efficiency Data-Framework data. Heating oil price from BoilerJuice, 25 September 2026, converted at 10.294 kWh a litre from the DESNZ greenhouse gas conversion factors 2026. Energy prices from Ofgem price cap, October to December 2026.