What is A Boiler Scrappage Scheme?

Last updated: 16 Feb 2023

The boiler scrappage scheme was one of the government’s flagship policies to help the country reduce greenhouse gas emissions, and make our homes more energy efficient.

What is A Boiler Scrappage Scheme?

Boiler scrappage scheme - What is it?

The boiler scrappage scheme was one of the government’s flagship policies to help the country reduce greenhouse gas emissions, and make our homes more energy efficient.

The scheme was simple; if you had an old, unreliable and inefficient boiler then the government would give you a voucher for £400 to put towards a new one.

This policy attracted a lot of publicity and was hugely successful, but was closed to new applicants in England and Wales in 2010, and in Scotland in 2013.

Despite this, the name has stuck around and there are lots of different companies advertising similar schemes, grants and incentives. So are these offers worth taking up?

Government backed boiler schemes

Heating boiler control panel detailAlthough there is no longer the offer of a £400 voucher towards a new boiler which was part of the original boiler scrappage scheme, the government has other schemes to help meet the cost of replacing a boiler with something more efficient.

Funding for these schemes is not reliable though.

The government allocates a set amount of funds each year, and once it’s spent, the scheme is closed to all new applications.

Another £120 million of funding is due for release at the start of the new financial year in 2015, but after that the future of government funding to pay towards boilers and other energy efficiency improvements will depend on the results of the General Election in May 2015.

Green deal for new boilers

setting boilerWhen the Boiler Scrappage Scheme ended in 2010, it was replaced with the Green Deal scheme.

Things are complicated further by the fact that devolved parliaments in Edinburgh, Cardiff and Belfast have their own schemes which operate slightly differently, but the basic premise is the same in all cases.

Green Deal is a loan scheme, which gives homeowners a loan to fund energy efficiency improvements on their home.

This could include replacing an old boiler with something more up to date, but could also cover other home improvements such as double glazing, cavity wall insulation or loft insulation.

The money is then paid back every month or quarter through your electricity bills.

The main idea behind Green Deal is that you can never borrow more than the expected savings from making the improvements.

The interest rates on the loan are kept low, but it is important to realise that the loan is attached to the property rather than you as an individual, so if you sell the house before the loan is paid off, it’s up to the new owners to continue with the repayments.

Electric water heater but what is the boiler scrappage scheme about?

Other types of finance for new boilers

Control panel of the gas boiler for hot water and heatingBoiler manufacturers and the energy companies know that there are lots of families out there who would struggle to find around £1000 to replace their boiler in an emergency, and many more families who would like the option of paying for their new boiler monthly rather than in one fell swoop.

There are lots of different finance schemes around, and it’s important to take time to research them and decide which is best for you and for your property.

It’s always best to work out what sort of boiler you need and look at which brands win the “best buy” recommendations from consumer magazines and then see what sort of finance deals are available on those types of boilers rather than approaching things from the opposite angle and basing your choice of boiler on what finance is available.

Boiler manufacturers such as Baxi offer finance packages, but obviously on their own products only.

Other companies like British Gas or Scottish Power also offer finance packages to help spread the cost, so make sure you shop around to get the best deal.

Compare the total price of the boiler and taking out the finance, and remember that if the APR (annual percentage rate) appears high, you might be able to get a better deal elsewhere.

Financing a new boiler and other home improvements in different ways

Electric boiler with smart controlThere are of course many other ways to pay towards your new boiler.

Many companies are still advertising scrappage or trade-in schemes, but these are not to be confused with the official government backed schemes which are no longer operating.

However, depending on your circumstances they might still be a good way of getting a new boiler.

You could dip into savings to buy the boiler and have it installed, or approach your bank, building society or other lender about getting a personal loan to cover the cost.

Credit cards are another alternative, and if you have access to a 0% card, this could be the most cost effective option.

If you are planning a more extensive programme of home renovations such as installing a central heating system from scratch along with an extension, or a new roof, you could ask your mortgage lender for a property re-mortgage to meet the cost.

Weigh up the cost of all the different options and decide which is best for you.

There is no right or best way of paying for a new boiler as everyone’s financial situation is different.

The only golden rule is to consider all of the options before agreeing to go ahead.

Replacing your boiler in Wales, Scotland and Northern Ireland without the boiler scrappage scheme

Gas-fired boilerIf you’re not in England, check out what different schemes are operating in your local area.

Scotland operates a Green Homes scheme which is very similar to the Green Deal in England, and although all funding is currently on hold, you can add your name to the waiting list for future funding if available.

The scheme in Wales is called Nest Wales, and offers funding to those struggling to pay for energy efficiency improvements.

Northern Ireland is the only part of the UK not to offer a scheme allowing people to spread the cost of a new boiler in a government backed scheme, but there are government grants of up to £1000 available for households with an income of less than £40k and with a boiler which is at least 15 years old.

The beauty of these grants is that they do not have to be paid back, but the scheme is renewed every April, so get in quickly if you think you may qualify.