The money
Cash spending rose 53% since 2010. In real terms, 5%.
First, a warning about the numbers
“How much does Britain spend on defence?” has four correct answers for 2024/25. Arguments about defence spending are often really arguments about which one someone picked.
- Total DEL£68.5bnThe budget Parliament votes to the MOD.
- Net cash requirement£64.1bnThe cash the department actually draws.
- Defence spending£60.2bnRunning costs plus investment, after depreciation. The longest consistent run, so the one charted here.
- NATO definition2.28% of GDPAn international standard including military pensions and some non-MOD spending, excluding some MOD spending. Not convertible into the figures above.
These are not interchangeable.NATO’s own publication warns its figures “may considerably diverge from those referenced by media, published by national authorities or given in national budgets”. You cannot divide an MOD pounds figure by GDP to get the NATO percentage, and this section never draws them on one axis.
A decade of cuts, then a recovery to the starting line
£57.1bn
Real-terms spending in 2010/11
£46.2bn
Its low point, in 2016/17
A fall of 19%
14 years
To return to the 2010/11 level
The gap between the two lines is inflation. Cash spending rose steadily; in real terms it fell for six years and took until 2024/25 to get back to where it started.
Source: MOD, Defence Departmental Resources 2025 (Worksheet 1: Defence Expenditure Outturn), published 15 January 2026. Real terms in constant 2024/25 prices, HM Treasury GDP deflator of 30 September 2025.
The current increase is an increase on the 2016/17 trough, not on 2010. Both “defence was cut” and “defence is rising sharply” describe real parts of the same line.
What is planned next
The Defence Investment Plan commits £297.7bn over four years. This is Total DEL — the first measure in the list above, not the one charted before it. Against 2024/25’s £68.5bn, the plan is growth of about £10.6bn by 2029/30.
Total departmental expenditure limit, split between day-to-day running costs and investment in equipment and infrastructure. These are planned allocations, not spending that has happened.
Source: MOD and HM Treasury, The Defence Investment Plan, Table 1: Defence Spending Profile Over the Next Four Years, published 30 June 2026.
Investment grows faster than running costs — £26.6bn to £34.5bn, while day-to-day spending rises under £3bn. That is a deliberate tilt towards equipment, and equipment is where the delivery record is weakest.
2.6%, 2.7%, 3%, 3.5% — what these actually are
These are routinely listed as one rising sequence. They come from different documents, and two are not measuring the same thing.
- 2.7%2027/28Funded plan
The commitment in the Defence Investment Plan: NATO-qualifying spending reaching this level.
- 2.6%2027Different document and definition
From the announcement of 25 February 2025. It exceeds the 2.5% figure only because the definition was widened to include the security and intelligence agencies — not because more money was added.
- 3%Next parliamentAmbition — funding to be set at the next spending review
An ambition, not a funded plan. The money behind it would be set at a future spending review.
- 3.5%By 2035NATO commitment — core defence only, alongside the wider 1.5% resilience pledge
The NATO summit commitment for core defence, alongside a separate 1.5% pledge on wider security and resilience. Together those make the "5%" headline — which is not 5% on the military.
The one to watch is 2.6%. It beats 2.5% because the definition was widened to include the security and intelligence agencies — not because money was added.
Britain is no longer Europe’s standout spender
On the NATO measure the UK has been above the 2% guideline throughout. But Germany has gone from 1.16% to an estimated 2.69% and overtaken it. Britain is no longer distinctive in Europe for spending more — it is distinctive for having always done so.
The six G7 countries that are NATO members. 2026 figures are NATO estimates.
Source: NATO, Defence Investment of NATO Countries (2014–2026), Table 3. Core defence expenditure as a share of real GDP, 2021 prices. 2025 and 2026 are NATO estimates.
Why six countries and not seven. Japan is a G7 member but not a NATO member, so it does not appear in NATO’s defence expenditure tables. Rather than substitute a figure calculated on a different basis, it is left out of this comparison — a number that looks comparable but is not would be worse than an acknowledged gap.
Next: the people who have to operate what the money buys. Or back to the defence overview.