UK defence spending: explained

Ahead of his attendance at a NATO summit in Washington DC, commemorating the Alliance’s 75th anniversary, the Prime Minister Sir Keir Starmer committed his government to spending 2.5% of the UK’s GDP on defence. But crucially Mr Starmer, unlike his predecessor, has not put any timescale on that commitment.

On the last day of the NATO summit, Mr Starmer said he didn’t “want to do what has been done in the past, which is to set an arbitrary date”, and that “simply plucking a date is the politics of yesterday”. 

Previously, the Conservative government under then-Prime Minister Rishi Sunak said in April 2024 that the UK would reach the 2.5% level (around £87 billion a year) by 2030.

Members of NATO have a long-standing commitment to spend 2% of their nation’s GDP on defence expenditure, as defined by NATO. 

Below we take a closer look at what the UK currently spends on defence, and how that compares historically and with other countries.

This explainer is one of series Full Fact is publishing exploring a range of key political topics. We’ll be updating these articles on a regular basis—this article was last updated on 12 July 2024 and the information in it is correct as of then.

How much does the UK currently spend on defence? 

In the most recently completed financial year (2023/24), the UK's defence budget was £54.2 billion, up from £52.8 billion in 2022/23. According to figures published by the government in April, this is expected to increase to £57.1 billion in 2024/25. 

However this only represents Ministry of Defence (MOD) spending. When comparing the UK’s spending with other countries, a more common measure is ‘NATO-qualified defence expenditure’, which as we explain more below includes some other spending, such as on armed forces pensions. 

In the government figures published in April, the UK’s NATO-qualified defence expenditure was forecast to be £64.6 billion. That’s expected to amount to 2.32% of GDP in 2024/25, up from 2.28% in 2023/24.

When we asked the MOD whether its forecasts for 2024/25 defence spending remained the same following the election, it told us there have currently been no changes, but that it’s not unusual for government departmental budgets to change over the year. 

Future defence spending 

Ahead of the general election, both Labour and the Conservatives said they wanted to increase the UK’s defence spending to 2.5% of GDP—but the Conservatives put a clear timescale on this, whereas Labour did not.

In April 2024, Mr Sunak said his government would increase spending to 2.5% of GDP through a series of annual increases between 2024/25 and 2030/31. 

Further back, following Russia’s invasion of Ukraine in 2022, then-Prime Minister Boris Johnson had also said the UK would “reach 2.5% of GDP on defence by the end of the decade”, but later referred to his comment as a “prediction”.

In its manifesto for the 2024 general election, Labour also mentioned the 2.5% figure but did not specify when it would spend that amount, saying instead that its government would “conduct a Strategic Defence Review within our first year in government, and we will set out the path to spending 2.5 per cent of GDP on defence”. 

Ahead of the NATO summit, Mr Starmer said the government would launch a Strategic Defence Review the following week, with foreign secretary David Lammy MP saying this would be conducted “in consultation with allies, industry and external experts”. The government said this “will set out a roadmap to achieving 2.5% of GDP on defence”. The government has not said how long this review will take. 

It’s worth noting that some, including then-defence secretary Grant Shapps earlier this year, have argued that increasing defence spending to 2.5% of GDP does not go far enough. 

How has UK defence spending changed over time?

As a proportion of GDP, defence spending fell sharply during the 1980s and 1990s, and has fallen much less since. 

There have been some small fluctuations in these trends, which appear to correlate with geopolitical developments and subsequent demands, such as a rise in the early 1990s due to the Gulf War. 

Where does the 2.5% target come from?

In 2006, at a summit in Riga, Latvia, NATO members agreed to spend 2% of their nations’ GDP on defence. This commitment was reaffirmed in 2014 after the Russian invasion of Crimea, alongside a call for members to spend 20% of this on “major new equipment” by 2024. 

As definitions of government defence spending can vary country by country, NATO has its own definition for spending that contributes to the 2% target. In simple terms, NATO describes ‘defence expenditure’ as “payments made by a national government (excluding regional, local and municipal authorities) specifically to meet the needs of its armed forces, those of Allies or of the Alliance”. 

Included within NATO’s definition are retirement pensions made directly by governments to retired military employees, the cost of stockpiling war reserves of equipment or supplies for use directly by armed forces, and certain research and development costs.

Some costs included within NATO’s definition of defence spending currently sit outside the realm of the UK’s Ministry of Defence budget, such as armed forces pensions and the Integrated Security Fund. As such, the UK’s NATO-qualifying spend of £64.6 billion for 2024/25 is more than the MOD’s budget for the same year. 

The 2.5% of GDP target for defence expenditure the UK has said it will achieve is above the level NATO members are committed to. In April 2024, the then-Conservative government said the 2.5% target “sets a new standard for other major European NATO economies to follow”, and that if all NATO members also increased their defence spending to 2.5% of GDP, “our collective budget would increase by more than £140 billion”. 

How does UK defence spending compare to other countries?

The UK’s defence spending as a percentage of GDP is relatively high compared to other NATO countries— it’s ranked nine out of 32 member states according to estimates for 2024. 

The majority of NATO countries are expected to meet the 2% spending commitment in 2024, but this is the first time in recent years that has been the case. Only the UK, USA and Greece have consistently met the target since 2014, and the UK has met it since its introduction in 2006 (with a few changes to the definition of defence spending along the way).

NATO countries combined accounted for over half of the world’s military spending in 2023, according to estimates from the independent Stockholm International Peace Research Institute (SIPRI). The bulk of this came from the US, though it’s worth noting that the US has military commitments all over the world, some of which are not related to NATO.

Overall, the US spent $916 billion on military expenditure in 2023, according to SIPRI, the highest amount of any country. It was followed by China, which spent an estimated $296 billion, Russia ($109 billion) and India ($83.6 billion). Saudi Arabia was the fifth highest spender ($75.8 billion), followed by the UK ($74.9 billion). 

In 2023, military spending increased in all five geographical regions—Africa, Americas, Asia and Oceania, Europe and the Middle East—for the first time since 2009. 

SIPRI cites the war in Ukraine, following Russia’s invasion in 2022, as one of the main drivers of these increases, alongside “escalating geopolitical tensions in Asia and Oceania and the Middle East”. It commented earlier this year that “the NATO target of 2 per cent [is] increasingly seen as a baseline rather than a threshold to reach”.

How is NATO itself funded?

NATO’s budget for 2024 is around €3.8 billion. 

NATO uses common funding, by which allied nations contribute to a pool of collective resources. This money is then used to pay for things such as NATO headquarters, missions and operations conducted worldwide, air and naval basing facilities, satellite communications and control systems.

The amount countries contribute depends on their Gross National Income (GNI). The US and Germany are the biggest contributors to this common funding, at 16%, followed by the UK at 11%.