Heating Efficiency

Whether you are heating hot water for the sink/bath or radiators for your heating, the same basic rules apply and if you understand these, it will help you decide what system is the most efficient or the most cost effective. Generally the two are related but there are two other factors that need to be considered. The general expression to understand efficiency is:

Total Cost = (Average Energy Unit Cost x Size of system x Time used x Efficiency) + Installation Cost + Maintenance Cost

Hopefully most of these will make sense but what is worth noting is that some of these you have control over and some you don't.
The Average Energy Unit Cost (£/Kwh) is the amount it costs you for 1 unit of energy (gas/oil/electricity) for your system. Although the unit costs are different for each fuel type (and bottled gas is more expensive than mains gas) the unfortunate truth is these prices generally increase all the time so an average cannot really be based on todays price but perhaps double todays rate for something that might last 20 years.
The Size of system (Kw) is not something that is likely to vary, you need X amount of heat for a given size building and trying to save some money here is unlikely to be helpful. Likewise a bona-fide heating engineer should not over-spec the system so much that it costs you lots)
Time used (Hrs) is something that you can vary. This is the total hours over the lifetime of the system. For example 20 years at 8 hours per day over 6 winter/spring months = 29,200 hours. Obviously the less the system is running, the cheaper it will cost. It is NEVER cheaper to keep the system on 24 hours as opposed to letting it cool down during the day if you are out. Work out roughly how long it takes to heat up from cold (usually about an hour) and time it to come on. The system loses less energy when it is colder so it is more efficient.
Efficiency is a ratio of how much energy you put in via your energy source is turned into heat. Electrical appliances might be close to 100% efficient. Gas systems vary from around 70% to 90% but should be specified on the boiler on in the boiler manual.
The installation cost (£) is a one-off but is usually higher for gas systems which require gas work, plumbing and water whereas electrical systems are easier to install. If you are considering work, there is no harm in getting a few prices for electrical vs gas to see what the difference is here. It is also worth mentioning that you might want to spend extra on a system which will involve a longer payback period but which is more efficient just to lessen your reliance on fuel and the price increases.
Maintenance Cost (£) is something else worth considering. Electrical heating is often fit-and-forget and you generally don't get these units regularly serviced (unless you are a school/hospital in which case proactive work might benefit) whereas a boiler is worth having serviced once per year to ensure it is in good condition. You can find out how much a single service or an ongoing contract costs by contacting a plumber or gas company like British Gas.
My own view is that electricity will eventually be cheaper than gas since natural gas is running out whereas electricity can be produced using renewables and nuclear. However, for the time being, I like gas systems. They are well understood and you can fit a lot of heating power into a smaller space. I also like the idea, however, of keeping hot water cylinders (which most people remove) and using solar panels and wood-burning stoves to heat water in order to save gas or electricity costs.