Interest costs
The government pays interest on its debt every day of the year. Here is what that costs, and why the rate matters as much as the size of the pile.
Interest cost breakdown
- Per year
- £110 bn
- Per month (average)
- £9.2 bn
- Per day (average)
- £301 m
- Of government revenue
- 9%
- Of GDP
- 3.4%
Annual figure: OBR, Economic and Fiscal Outlook March 2026 (central government debt interest, net of APF). Monthly and daily are simple averages of the annual figure. Per cent of revenue and GDP are calculated. provisional
Why the interest rate matters as much as the debt
The same pile of debt can be cheap or expensive to hold, depending on the interest rate paid on it. Two things pushed UK debt interest up after 2021. High inflation raised the cost of index-linked gilts, whose value rises with prices. Higher Bank of England rates raised the cost of new and refinanced borrowing.
So the cost can rise even when the debt itself is flat.
Historical trend
Annual debt interest over time
| Year | Debt interest (£ bn) |
|---|---|
| 1979 | 8 |
| 1990 | 17 |
| 2000 | 25 |
| 2008 | 31 |
| 2010 | 44 |
| 2015 | 45 |
| 2019 | 48 |
| 2020 | 39 |
| 2021 | 70 |
| 2022 | 110 |
| 2023 | 108 |
| 2024 | 105 |
| 2026 | 110 |
Source: Bank of England 'A millennium of macroeconomic data', ONS and OBR for recent years. estimated
How to read these
Monthly and daily figures are simple averages for illustration. Actual interest is uneven, with large peaks when index-linked gilts are uprated. Figures are provisional and may be revised.