UK defence spending

How much does the UK spend on defence?

In the 2023/24 financial year, the UK spent £54.2 billion on defence. This is expected to rise to £57.1 billion in 2024/25, which is a 4.5% increase in real terms.

As a member of NATO, the UK is committed to spending 2% of GDP on defence expenditure that meets NATO’s definition. The latest NATO figures show that the UK spent an estimated 2.3% of GDP on defence in 2023.

How has defence funding changed recently?

Real terms defence spending fell between 2009/10 and 2016/17 from £57.0 billion to £44.5 billion in today’s prices, before starting to increase again to nearer its 2010 levels.

The Ministry of Defence received a four-year settlement at Spending Review 2020, when the Government allocated an additional £16.5 billion to the defence budget over the period 2020/21 to 2024/25. The Government described this as the “largest sustained increase in the core defence budget for 30 years”, above the Conservative manifesto commitment to increase spending by 0.5% above inflation.

Following Russia’s invasion of Ukraine, there were renewed calls for an increase to defence spending, particularly in the context of rising inflation since the start of the conflict in February 2022.

The Spring Budget 2023 allocated an additional £5 billion to defence spending over the next two years (2023/24 and 2024/25), and a further £2 billion per year in subsequent years up to 2027/28. This increases defence spending by a total of £11 billion over this five-year period.

As a result, the annual defence budget is expected to be £11.2 billion higher in cash terms by the end of the current Spending Review period (£57.1 billion in 2024/25 compared with £45.9 billion in 2021/22). However, when adjusted for inflation, the increase in defence spending over this period is expected to be £4.4 billion (8.4%).

Most of this additional funding has been allocated to capital budgets (money that is spent on major projects and investment), whereas the Ministry of Defence’s day-to-day budget is set to decline in real terms over this period.

Commitments to increase defence spending to 2.5% of GDP

As a member of NATO, the UK is committed to spending 2% of GDP on defence each year. It is one of 11 out of 30 NATO member countries estimated to have met this target in 2023.

As part of the Integrated Review Refresh 2023 (which sets out the UK Government’s national security and international policy), Prime Minister Rishi Sunak set out a longer-term ambition to increase defence spending to 2.5% of GDP. However, no timeframe was given for achieving this goal.

During a visit to Poland in April 2024, the Prime Minister confirmed that the UK would reach the 2.5% target by 2030. This plan is outlined in the ‘Defending Britain’ policy paper.