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UK national debt: what the state earns and what its debt costs

💷 National Debt live IMF · OECD · OBR

In 2025-26 the government raised about £1,235 billion in taxes and other receipts — and spent about £110 billion of it on debt interest. That's roughly £1 in every £11 collected, more than the defence and transport budgets combined, before a single hospital, school or pension is paid for. OBR, March 2026 forecast; reviewed 3 Aug 2026.
What the debt costs now — and what it would cost at today's rate
Loading the live figures…
Why the bond market sets that bill. The government borrows by selling gilts — IOUs that pay a fixed interest rate. The "yield" is the return buyers demand: when investors feel confident lending to Britain, yields fall; when they want more reward for the risk, yields rise. Existing gilts keep their old rates (the average gilt runs ~14 years, the longest in the G7), so a yield move doesn't reprice the whole debt overnight — it reprices every pound of new and refinanced borrowing, hundreds of billions a year. About a quarter of the debt is also index-linked, so inflation feeds the bill directly. Today's ten-year rate is in the live figures above, with the month it was read.
i The OBR's own sums, from the 4.5% ten-year rate in its March 2026 forecast (the live rate above is newer): if borrowing costs settle at 5.5% instead of 4.5% — a rise of one whole percentage, not a fraction — the government is about £15–16 billion a year worse off within five years. That is roughly what putting 2p on the basic rate of income tax raises, spent before a single choice is made about hospitals or schools. If instead the rate falls to 3.5%, the same £15–16 billion a year comes back. That is why Budgets are written to reassure bond buyers first and headline-writers second.
Sources: ONS public sector finances; OBR Economic & Fiscal Outlook March 2026 and debt-interest ready reckoner (the cash figures and the 2p-on-income-tax comparison, reviewed after each Budget and Spring Statement, next expected autumn 2026). The live figures are the IMF's World Economic Outlook and Fiscal Monitor (debt, revenue, net interest) and the OECD's monthly long-term interest rates (the ten-year yield, CC BY 4.0) — the same series that colour the World map's Debt layer. The ten-year path is our calculation and says so where it appears.

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💷 How to read the debt figures

Why today's interest bill was set years ago
The government borrows by selling gilts, and a gilt keeps the interest rate it was sold at until it is repaid. Most of the debt on the books today was sold between 2016 and 2021, when the market charged well under 1.5% for ten-year money. So the bill paid now is the average of those old rates — not today's. The chart of the two lines shows exactly that: the rate the market charges jumps around; the rate the whole debt pays creeps.
"Costs now" and "at today's rate"
Costs now is the IMF's figure for net interest paid in the last reported year, as a share of everything the government took in — the World map calls it Current debt. At today's rate is what that share would be if every pound of the debt were borrowed at this month's ten-year rate — the map's Forward debt. It is a what-if, not a forecast. The gap between them is the cost still on its way.
How the road between them is drawn — our arithmetic
Roughly one pound in fourteen of the debt is repaid and re-borrowed each year (the Debt Management Office's average life of the gilt portfolio is about 14 years, the longest in the G7). Each year, that slice moves from the old rate to today's, so the bill closes one fourteenth of whatever gap is left: 7% of the way in year one, about a third by year five, about half by year ten. The formula is printed on the tile with every term filled in. It is the reason Britain feels a rate rise more slowly than other countries — and for longer.
What the model leaves out, on purpose
It holds the debt at last year's size, so new borrowing to cover the deficit — which is all at the new rate — is not in it; that is why the OBR's own reckoner gives a bigger five-year figure than our line does, and why our line is a floor. About a quarter of gilts are index-linked and follow inflation, not the yield. "Costs now" is net interest and "at today's rate" is gross, so the true destination sits a little below the forward line. And the ten-year rate stands in for the whole range of maturities.
The ±1 point lines
The same model run with the ten-year rate one percentage point higher and one point lower. They are not a range we predict; nothing on this tile forecasts where rates go.
Where the numbers come from
Debt and revenue: the IMF's World Economic Outlook and Fiscal Monitor. The ten-year rate: the OECD's monthly long-term interest rates, same calendar month in each of the last ten years. Both are the series behind the World map's Debt layer, refreshed by the same daily job, so the map and this tile can never disagree. The cash figures in pounds are the OBR's.

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