Is £400 enough to persuade you to upgrade your boiler

The Government's scrappage scheme gives cash to homeowners seeking to replace inefficient boilers.

The first application forms for people to claim £400 under the Government's boiler scrappage scheme were posted out this week. Some 6,000 people had pre-registered for the forms, which were issued by the Energy Saving Trust from Monday.

But with just 125,000 possible grants available under the scheme, experts say anyone delaying applying could miss out.

"There are approximately four million G-rated boilers in the UK which qualify for the scheme, but there are only 125,000 grants available," says Kevin Miles, chief executive of npower retail. "Our advice is don't leave it too late, get it before it's gone."

His company, along with British Gas, is matching the £400 offered by the Government to give people up to £800 off the cost of a new boiler which could be as much as a third off the cost of an installation.

But Scott Byrom, utilities manager at moneysupermarket.com says the scheme may not go far enough for many. "While it is fantastic to see such measures put in place to help combat high fuel prices and carbon emissions, I am not sure it is enough to help encourage customers to replace their boilers as the overall costs are still high."

Plumber Charlie Mullins, managing director of Pimlico Plumbers, goes even further. He claims the scheme will fail to benefit those who really need it and is just an attempt to win votes.

"A new boiler costs around £2,000, so Labour's £400 subsidy is only going to help people who could have afforded a new boiler in the first place," says Mr Mullins.

"They say it will help poor families cut their heating bills by £200 a year, but where does the Government propose this group are going to get the other £1,600 from?"

Even if you can afford a new boiler, should you rush to take advantage of the scrappage scheme? Annie Shaw from website cashquestions.com, warns people thinking about applying for the grant to think about the costs.

"The boiler scrappage scheme looks attractive, but consumers should beware of hidden costs unless their old boiler is actually on the point of packing up," warns Shaw.

"Modern condensing boilers can be more expensive to fit and maintain than older less fuel-efficient models. While you will find that your gas bills will go down with a modern boiler, don't underestimate the potential cost of repairs and parts. Because modern boilers contain more temperamental electronic parts, these may need more regular and expensive attention.

"Even with the proposed scrappage grant of up to £400 from the Government, installing a new boiler will almost certainly cost you more over five years than keeping an old, well maintained, albeit less fuel-efficient model. If you are thinking of replacing your old boiler for "green" reasons, don't forget to factor the eco-cost of manufacture, transport and installation of your new purchase and the disposal of the old one into your calculations," says Ms Shaw.

Her concerns are echoed by energy expert Gareth Kloet of Confused,com. "The cost of a new boiler will vary considerably plus there are installation costs to add which can also vary depending on the location/accessibility and price of the installer's time.

"Anyone considering taking advantage of the boiler scrappage scheme should therefore resist being bamboozled by the headline offers. Instead it's vital to shop around and consider the total cost of both the replacement boiler and associated installation costs."

Pensioners and low-income households have also been warned to check out their eligibility for a Warm Front grant before applying for the boiler scrappage scheme. If they apply for the scrappage scheme, they will forfeit their right to the Warm Front funding, which could give them up to £3,500 towards the cost of improving their home, although the money must go towards such things as loft insulation, draught-proofing and repairs to an existing heating system, as well as a new boiler.

In fact under Warm Front you can only get £300 towards the cost of a new boiler so if that is the only improvement you need, then the scrappage scheme will be the better option.

Bearing all that in mind the temptation to cut up to £800 off the cost of replacing a dodgy, old boiler could be hard to resist, but how can you qualify?

The boiler scrappage scheme covers the least-efficient gas boilers which have the lowest G-rating. A Corgi-registered professional can tell you whether your boiler is eligible for scrappage, but there are a couple of quick tests you can do at home. If your boiler has a permanent pilot light it is likely to be G-rated. If it is more than 15 years old and gas-fired, then it is probably eligible and if it is oil-fired and more than 25 years old, it is likely to be eligible.

You must live in England and be either a homeowner or a private tenant. Landlords of multiple properties can apply, as long as each voucher is assigned to a different property.

If you are eligible you can apply for vouchers from the Energy Saving Trust, which you must use towards buying any A-rated or equivalent gas, oil or LPG boiler, boilers with a passive flue heat recovery device, micro CHP units or MCS-registered biomass boilers and heat pumps. Solar thermal energy systems are also covered if combined with an eligible boiler replacement. Electric boilers are not eligible, regardless of manufacturer.

To get the additional £400 from npower or British Gas, you'll need to talk with the companies directly. In fact npower's offer goes further, offering to provide £400 for those with boilers up to a c-rating. That means people with newer boilers may yet be able to get some cash off of a replacement even if they don't qualify for the Government scheme.

When it comes to saving money, don't just stop by getting a more efficient boiler, says moneysupermarket's Scott Byrom. "Combining a new boiler with a move to the cheapest energy tariff could see customers saving up to £525 a year on their energy bills," he says.

"There is a desperate need for Britain to become more energy efficient, and cutting household bills is a key part of this. Households should act immediately to ensure they are on the correct tariff for their usage and region – and moving online to a dual fuel direct debit deal is the easiest way to make savings on their energy bills."

Family in need: 'We were left without heating'

No heating during the big freeze left Jeremy Stewart with little choice but to replace his boiler. But the timing has meant he'll save £800 on the cost.

"We had put up with the boiler playing up for a while, and we had continued to get it repaired rather than replacing it as the thought of spending £3,000 on a new boiler just before Christmas didn't appeal," says Jeremy, a marketing director who lives in South Oxfordshire with his wife, Sonia, and daughter, Amelia.

"However, when the boiler became even more unreliable early in the new year, it left us without heating during the big freeze, which made us assess whether now was the time to replace, rather than repair, it.

"I had read about the boiler scrappage scheme, so we looked into whether our boiler qualified."

The family have lived in their current home for five years, but the boiler was installed when the house was built in the late 1980s/early 1990s. Therefore it does qualify for the scheme.

"I spoke to a few suppliers, from big energy firms to local companies, but I was impressed with the service I received and the deal offered by npower," says Jeremy. "They explained the scrappage scheme to us very well, confirmed our boiler qualified, and have kept us up to date on when an engineer will be able to reach us.

"We will save around £800 in total. For us, the boiler scrappage scheme came at the perfect time as it has enabled us to replace our old, unreliable boiler at a much lower cost."

Cash grant: How to apply

For more details on the Energy Saving Trust £400 voucher call 0800 512 012 or go to www.energysavingtrust.org.uk.

For further information on npower's £400 offer call 0800 0722 999 or visit www.npower.com.

For more information on British Gas's £400 offer visit www.britishgas.co.uk/yourboiler or call British Gas on 0800 009 4450.