Prime Minister Keir Starmer published the Defence Investment Plan on 30 June 2026, setting out a route to raise NATO-qualifying defence spending to 2.7% of GDP by 2027/28 and committing to meet the alliance's evolving targets by 2035, according to the Defence Investment Plan published by the Ministry of Defence.

The centrepiece is a £15 billion new funding boost earmarked to transform the Armed Forces. The government projects that this spending uplift will create nearly 60,000 extra direct and indirect jobs across UK industry. The plan also allocates £790 million over four years to strengthen air, drone and missile defences at British homeland and overseas bases, including new radar systems, according to Reuters.

The 2.7% figure explained

The 2.7% covers NATO's core defence metric — essentially military spending proper. But the UK's broader commitment, announced in the PM's speech, is to spend 5% of GDP on wider security. That encompasses energy security and critical infrastructure alongside conventional defence. The 5% pledge was first signalled at the June 2025 NATO summit; this plan sets out how the UK intends to deliver it by combining both defence spending and homeland security.

Why the timing matters

The plan was originally due in 2025 but was delayed, prompting public warnings from military chiefs in early June 2026 that the UK was running out of time. Starmer then personally confirmed to NATO Secretary-General Mark Rutte on 13 June that the document would land before the NATO summit in July 2026. It has done so, with days to spare. Publishing a costed, time-bound plan before the summit is partly how the UK signals credibility in alliance negotiations — showing detail rather than pledging aspirational percentages alone.

Forces housing and welfare

The plan sits alongside welfare commitments that have accumulated since late 2024. The government agreed to buy back 36,347 military houses from private ownership in December 2024, reversing an earlier privatisation. The Strategic Defence Review then added an extra £1.5 billion for forces housing. A planning application has been submitted for 265 new net-zero houses at RAF Brize Norton as part of the wider estate regeneration programme.

What analysts will watch

The 2.7% figure sits meaningfully above the old 2% NATO floor that dominated burden-sharing arguments for most of the past decade. But it remains some distance from the 3.5% core defence target that the alliance is now pushing member states toward, with the gap folded into the broader 5% wider-security envelope.

For the Treasury, the arithmetic is demanding. Defence spending is being asked to grow faster than most other departmental budgets at a time when fiscal headroom remains tight. The 60,000 jobs projection will be scrutinised closely by the Office for Budget Responsibility and independent analysts — industrial multiplier claims of this kind have historically tended toward optimism. Whether the 2027/28 and 2035 milestones survive future spending reviews intact is the question Westminster insiders will be watching closely.