Prime Minister Sir Keir Starmer has unveiled the long-awaited Defence Investment Plan (DIP), describing the new funding as a major historic shift for the country. Analysts are now examining whether these financial commitments align with the UK’s promises to Nato.
While the Ministry of Defence budget for 2026-27 is set at £68.3bn, actual Nato-qualifying defence spending includes additional items like military pensions. By 2025, the UK spent £70bn on this measure, equating to 2.4% of GDP. Starmer has pledged to reach 2.5% by 2027 and, by including intelligence agency spending, expects this to hit 2.6% that same year. Further ambitions include reaching 3% of GDP during the next parliament.
International commitments made at the 2025 Hague summit involve reaching 5% of GDP for broader defence and security by 2035, with 3.5% specifically dedicated to core military needs. Starmer suggests the current plan puts the UK at 4.2% under this expanded definition.
However, former Defence Secretary John Healey recently raised concerns, suggesting previous projections for 2030 were insufficient at 2.68%. The official DIP now estimates that spending will rise to 2.7% of GDP by 2027-28 and remain at that level through the end of the decade. This represents a minor increase of £600m compared to earlier estimates. Despite the Prime Minister’s claims of being on a trajectory to reach 3% of GDP, critics suggest current funding paths may struggle to meet the long-term 2035 target of 3.5% without future budget increases.
The government also highlights a £270bn total cash spend over four years, with an additional £15bn allocated since Healey’s resignation. Meanwhile, earlier reports of a £28bn budget shortfall remain officially unconfirmed by the Ministry of Defence.
