UK Defence Spending: The Path to 2.6% of GDP by 2027 and 5% by 2035
Published on 14.09.2025
The UK is committing to a step-change in national security. The headline is simple enough to repeat and hard enough to deliver: lift defence spending to roughly 2.6% of gross domestic product by 2027 and build towards five per cent by 2035. Inside that headline are three moving parts that matter far more than the top-line number. First, the target doesn’t apply to a single monolithic budget. It distinguishes between “core defence” and a broader category labelled “security and resilience.” Second, the timing is staggered, with a near-term milestone in this parliament and a more ambitious destination set for the next decade. Third, the funding mix will force choices, because long-term ambitions collide with limited fiscal headroom today. Understanding those moving parts is the key to making sense of what this shift means for public services, industry, and households.
Start with the composition. When policymakers talk about five per cent of GDP for national security by 2035, they split the envelope into a 3.5% target for core defence and another 1.5% for security and resilience. Core defence is the traditional heart of the budget: the armed forces, equipment plans, procurement, sustainment and the running costs that come with them. Security and resilience is wider. It touches cyber capacity, supply-chain hardening, key infrastructure protection, and the less glamorous but highly consequential work of making the state and economy more robust to shocks. The distinction matters because the nearer-term goal of hitting 1.5% for resilience is supposed to be achieved largely by reprioritising within departmental budgets that were already set at the Spending Review. In other words, not all of it will be fresh cash on day one. The heavier fiscal lift sits in the 3.5% core defence pathway later in the decade, with officials indicating an additional annual cost in the tens of billions by 2035 relative to recent baselines.
Now consider the timeline. The 2027 marker—moving core defence toward 2.6% of GDP—lands inside the current medium-term fiscal plan. The 2035 ambition is well beyond it, which is why it is both powerful as a signal and vague in practice. Targets at that horizon shape expectations in Whitehall and industry today: they encourage long-lead procurement, they invite the services to plan for force-structure changes, and they push suppliers to think about investment in capacity. But because the most expensive years arrive after the current parliament, the practical choices in this parliament are about laying track rather than reaching the final destination. Think approvals, frameworks, early lots of multi-year equipment programmes, training pipelines and the policy guardrails that stop a larger budget from being swallowed by avoidable overruns.
That brings us to the trade-offs. Britain’s fiscal headroom is thin. After the latest Spending Review, protected services such as the National Health Service were given firm commitments and unprotected departments were told to find administrative savings to protect frontline delivery. Layering a larger defence ambition on top of that framework creates arithmetic that is tight in good times and unforgiving in bad ones. If nominal growth is steady, debt interest behaves, and pay settlements across the public sector stay moderate, the exchequer can make incremental progress without tearing up the plan. If any of those variables move against it, the choice tree gets stark: defer elements of the build-up, find offsetting reductions elsewhere, or raise more revenue. None of those options are politically simple, which is why delivery discipline and sequencing loom so large.
Sequencing sounds technical; it is actually the single biggest tool to manage risk. A credible path to 3.5% for core defence by 2035 cannot be created by turning a dial in the Treasury. It must be built project by project, contract by contract, and skill by skill. That means aligning the equipment plan with realistic industrial capacity, spreading work so that multi-year programmes do not peak all at once, and fixing the incentives that have allowed cost growth and schedule slippage to become the norm in too many procurements. It means putting money into enabling capabilities—testing infrastructure, digital backbones, secure supply chains—that don’t generate headlines but make headline programmes possible. And it means giving the armed forces predictability so they can recruit and train for the force they will actually operate, not the one that appeared in a glossy brochure.
The workforce is the less discussed constraint, and it is decisive. More money does not conjure skilled engineers, cyber specialists, programme managers or test pilots out of thin air. The pathway to 2035 will fail if Britain cannot grow, attract and retain the talent to deliver it. That argues for partnerships with universities and further-education providers, for modernised pay and career structures in critical roles, and for procurement frameworks that make it easier for small, innovative suppliers to win work without drowning in process. It also argues for more flexible pathways into service, including reserve models that reflect how people build careers in the private economy. The skills conversation is not adjunct to the budget—it is the budget translated into capability.
Industry strategy sits alongside skills as the practical engine of delivery. Government wants to strengthen domestic capacity where it is economically sensible and strategically necessary. That leads naturally to a handful of priority areas: complex munitions and their supply chains; maritime build and sustainment; air domain integration across crewed and uncrewed systems; space-based services and their resilience; cyber and software-defined capabilities that can be iterated fast. Each of those areas requires upfront investment, predictable order books and lock-tight export and security regimes. The mistake of the past decade has been to pretend the state can buy strategic resilience like a commodity. The more honest approach is to treat resilience as a capability that is built, maintained and paid for every year. When officials talk about “security and resilience” taking up 1.5% of GDP, this is what they mean: protecting the nervous system of the economy and the connective tissue of the state, not just buying platforms.
Of course, the money must come from somewhere. The plan’s near-term phrasing implies that the resilience strand will lean on reprioritisation within existing departmental totals rather than a wholesale injection of new funds right now. That raises immediate questions for ministers beyond the Defence Secretary. If departments must carve out room for resilience, what stops that from becoming a stealth cut to core services? The answer lies in transparency and in the quality of project selection. If resilience spending reduces risk and future costs—for example by hardening digital infrastructure against outages, or by diversifying critical imports so crises do not force panic purchases—then it pays for itself over time. If it becomes a catch-all label for pet projects, it will crowd out value. The difference is governance.
Governance should not be an afterthought. To deliver a path that reaches 2.6% in 2027 and builds towards five per cent by 2035 without wasting money, the system needs strong, boring scaffolding: clear lines of accountability, independent challenge at the business-case stage, disciplined portfolio management, and public reporting that illuminates performance rather than obscures it. None of that is glamorous. All of it is cheaper than rushing and repenting at leisure. The public will accept higher outlays for defence and resilience if they believe the state is a capable buyer and manager. They will not accept it if the headlines become a drumbeat of delays, overspends and write-offs.
There is also a diplomatic dimension. Setting clear spending targets strengthens Britain’s voice with allies and suppliers. It signals seriousness about burden-sharing and helps shape multinational programmes that depend on pooled demand. But commitments are only as persuasive as the contracts and capabilities that follow. Partners notice when programmes slide, when political attention drifts, or when long-term goals flip with every change in government. The most powerful message the UK can send over the next two years is not another number; it is steady execution against the numbers already declared.
What does all this mean for households, businesses and the wider public realm? For households, the headline numbers will not translate into overnight changes, but they will shape the background conditions that matter: the resilience of energy, transport and digital networks; the security of supply chains for essential goods; the ability of emergency services to coordinate across systems that actually talk to each other. For businesses, especially in advanced manufacturing, software, cyber and space, the pathway points to a durable order book and a premium on quality and delivery. It also signals that compliance, security accreditation and export controls will tighten, which rewards firms that invest early in the systems and people to handle them. For public services beyond defence, the message is more complex. The near-term resilience push should, at its best, reduce the kind of shocks that send costs spiralling in health, education and local government. But the longer-term climb in core defence outlays will press on the same tight budgets unless growth and productivity do more of the fiscal lifting.
Sceptics will ask whether five per cent is realistic. The right answer depends on two questions that are more practical than ideological. The first is whether the state can get better at buying. A pound wasted on a late, over-engineered platform is a pound that cannot protect a hospital from a cyberattack or a port from a bottleneck. Procurement reform is national security policy by other means. The second is whether the economy can produce more. Defence spending as a share of GDP is easier to raise in a growing economy because the denominator does some work. That is why the targets should be read alongside a broader growth and productivity plan. Skills, investment, planning reform and export performance are not a distraction from defence—they are how the country pays for it.
There are risks that could knock the plan off course. Global energy prices could rise and keep inflation sticky, lifting debt-interest costs and squeezing headroom just as big programmes ramp. The labour market could tighten in precisely the specialist roles the plan depends on, fuelling wage pressure and delivery delays. The housing market could turn in a way that crimps consumer confidence and tax receipts. Any one of those shocks would not kill the trajectory, but they would demand sharper choices. Conversely, there are tailwinds that would make the climb easier: continued disinflation that lowers the cost of servicing debt; stronger nominal growth that lifts revenues without raising rates; a stream of small, early delivery wins that build public trust and unlock faster approvals for the next wave.
So what should readers watch over the next 12 to 24 months if they want to know whether the 2027 and 2035 markers are moving from politics to reality? Watch the balance between announcements and contracts signed. Watch the flow of money into enabling infrastructure and skills, not just into hardware. Watch the quality of the procurement pipeline and whether new frameworks actually shorten delivery without diluting scrutiny. Watch whether resilience projects are clearly defined, measurable and linked to reduced risk in critical services. And watch the candour with which ministers and officials describe slippage when it occurs, because the difference between a credible plan and a performative one is often the willingness to admit problems early and fix them.
If the government can maintain that discipline, the targets can become more than a slogan. They can become a programme that strengthens the armed forces, hardens the economy against shocks, and deepens industrial capacity in sectors that matter. If it cannot, the numbers will remain numbers, impressive in speeches and elusive in practice. The path to 2.6% by 2027 and five per cent by 2035 is neither a fantasy nor a given. It is a hard road made of thousands of decisions that must line up across departments, suppliers and parliaments. The sooner those decisions are taken with clarity, the more likely the country will reach the destination on time and with value for money.
In the end, the argument for higher defence and resilience spending is not just about geopolitics. It is about the kind of state the UK wants to be in a world where shocks are more frequent and interdependencies more complex. It is about building systems that fail less often and recover more quickly when they do. It is about giving people confidence that when they turn on the tap—literal or metaphorical—the water runs. Targets help set that course. Delivery will decide whether the country arrives.
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