For most of the past decade, UK defence spending sat at or just above 2% of GDP, the NATO minimum target, often reached through creative accounting that included intelligence spending and pension costs not counted by other members. The argument about whether the UK was genuinely meeting its NATO commitment was, by the end, largely semantic.
We’ve just moved on from that argument. NATO estimates put UK defence spending at 2.6% of GDP in 2026 – a figure that, regardless of accounting methodology, represents a genuine and substantial increase in real money flowing into defence. The Government has committed to 3% in the next Parliament and to 3.5% by 2035, in line with a new NATO target driven primarily by the shifting threat environment in Europe.
What the numbers mean in practice
2.6% of UK GDP is approximately $92 billion in 2026, more than £70 billion at current exchange rates. That figure places the UK comfortably as the third-largest defence spender in NATO, behind the United States and Germany, and ahead of France.
To put this in historical context: at the height of the Cold War, UK defence spending ran at around 4–5% of GDP. The post-Cold War drawdown brought it progressively lower, reaching a trough in the early 2010s at around 2.1%. The journey back to 2.6% and beyond represents a fundamental reversal of a 30-year trend – one driven primarily by Russian aggression in Ukraine and the broader deterioration of the European security environment since 2022.
What it buys
The increase is real, but it is being stretched across accumulated deficits in equipment, infrastructure, ammunition stocks, and personnel. Years of underfunding left the Armed Forces with capability gaps that cannot be filled overnight regardless of spending levels.
The Dreadnought ballistic missile submarine programme is consuming a large share of the increase, as are the SSN-AUKUS commitments. These are strategically essential but do not directly add conventional warfighting capability in the near term. The Defence Investment Plan’s autonomous systems investment is similarly long-term in nature, many of the £5 billion drone commitments will not deliver operational capability before the early 2030s.
What is being addressed more immediately is ammunition and munitions stocks, a critical gap exposed by Russia’s war in Ukraine, which demonstrated the voracious rate at which modern warfare consumes artillery shells, missiles, and air defence rounds at a scale that Western stockpiles were not built to sustain. The DIP includes specific commitments to sovereign munitions production.
The 3.5% commitment
The commitment to 3.5% of GDP by 2035 is the most ambitious defence spending pledge made by any UK Government since the Cold War. At current GDP projections, 3.5% would represent spending of well over £100 billion per year, roughly double the current level in nominal terms.
Whether successive governments will actually maintain that trajectory through the spending reviews, political changes, and economic pressures between now and 2035 is genuinely uncertain. Defence spending commitments have a poor historical record of surviving contact with fiscal reality. The 2.5% target, at least, appears to have cross-party political agreement behind it; the 3.5% path is more exposed.
What is clear is that the direction of travel has changed. After three decades of managed decline, the UK is in a sustained period of defence spending growth. The challenge now is ensuring that money is spent effectively – on the right capabilities, at the right pace, through a notorious procurement system that has not always demonstrated the ability to translate budgets into delivered equipment efficiently.
That last part may prove harder than raising the budget.
Read our analysis of ‘Burnham, Streeting, Healey: Who really controls UK Defence policy now?‘
