Millions could face higher gas bills to cover cost of neighbours switching to heat pumps

Ofgem has warned that households staying connected to the gas network could face higher bills as more homes switch to heat pumps. Under current arrangements, many costs of disconnecting homes that leave the network are recovered through charges paid by those who remain, raising concerns about whether the transition is fair.

The regulator’s illustrative scenario estimates that up to seven million homes could leave the gas network by 2034-35, potentially pushing a typical annual gas bill from £865 to about £943, a rise of 9.3 per cent. The Government aims for 450,000 heat pump installations a year by 2030; installation costs average £5,408, and grants of up to £9,000 are available. Ofgem says the actual bill impact will depend on the pace of switching and how costs are shared.