The UK Defence Investment Plan: what to watch

2 July 2026

The UK Government published its long-awaited Defence Investment Plan (DIP) on 30 June 2026, announcing an uplift in defence expenditure and establishing a roadmap for investment across priority capabilities.

The DIP confirms £298 billion of investment over the next four years, including £15 billion of additional funding above the previous Spending Review settlement. It envisages a sustained increase in annual defence expenditure, rising to nearly £80 billion by 2029 (approximately 2.7% of GDP). Early reactions to the DIP question whether this will place the UK on the right trajectory to meet its NATO commitment of spending 3.5% of GDP by 2035. The funding gap in the costings, which the next Prime Minister will need to plug, is also under scrutiny.

The UK Government's headline investment commitments include:

• Over £63 billion for the UK’s nuclear deterrent, including funding for Dreadnought and SSN-AUKUS submarines.
• £11 billion for munitions and weapons, including long-range strike capabilities and low-cost systems.
• Over £5 billion to deliver a "drone transformation" across the Armed Forces, including £650 million for expendable autonomous systems.
• More than £8 billion for the Global Combat Air Programme (GCAP) to develop next-generation combat air capabilities.
• Consistent with the 2025 Strategic Defence Review (SDR), the DIP focuses on modernising military capability and deepening collaboration with allies and industry as part of a broader shift towards "warfighting readiness".

This briefing covers five key areas that businesses and investors should watch closely.

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