UK Defence Spending Falls Below NATO Average – Report

NATO has revised its forecast for UK defence spending in 2025 to 2.31% of GDP, a decrease from a previously expected 2.4%, amid ongoing cuts and financial commitments to nuclear capabilities.

The new figure, published in NATO’s 2025 Annual Report, is lower than the 2.33% registered in 2020. The UK Government committed in February 2025 to increasing defence spending to 2.6% of GDP by 2027, and 3.5% by 2035, utilizing accounting measures including the Single Intelligence Account.

At 2.31%, UK defence spending falls below the alliance average of 2.77%, and is even lower than the average for Europe and Canada, excluding the United States, which stands at 2.33% of GDP.

The UK’s calculation of defence spending includes costs such as pensions, research and development, infrastructure, civil servant costs, and military aid. However, analysts estimate that focusing on warfighting capability, the UK’s military budget represents between 1.5% and 1.7% of its GDP.

UK defence spending: as bad as it looks?

Despite the downward revision, defence analyst Fox Walker at GlobalData suggests the change is unlikely to significantly impact public perception. Walker stated that increasing defence spending as a share of GDP is not currently a priority for most voters.

Walker also indicated that reaching the 2.6% target by 2027 remains feasible, but achieving the 3.5% goal by 2035 will require challenging existing priorities, such as funding for older demographics and the Triple Lock pension increase.

How does the UK compare?

The NATO report data reveals that the UK is lagging behind 13 other NATO members in terms of defence spending as a percentage of GDP, including Estonia (3.42%), Latvia (3.74%), and Lithuania (4%).

Poland (4.3%) and Türkiye (2.33%) are emerging as potentially more significant military powers within the alliance due to their ability to project conventional deterrence. Germany has also substantially increased its defence spending, rising from 1.16% in 2014 to 2.39% in 2025.

Approximately 25% of the UK’s defence budget is allocated to maintaining its nuclear deterrent, which reduces its capacity for conventional force projection. The UK has faced criticism for its inability to meet NATO commitments, such as deploying a sustained warfighting division, and its declining naval capabilities.

At the 2025 Nato Summit, Allies committed to investing 5% of GDP annually on core defence requirements and defence- and security-related spending by 2035, with a provision for 1.5% to be allocated to critical national infrastructure and civil resilience.