Research and development expenditure in the UK - Data and Analysis (2001-2033)

Total UK R&D expenditure is estimated to have increased at a compound annual rate of 5.9% over the five years through 2026, to reach £88.3 billion, including estimated growth of 4.3% in 2026. The period began with recovery from the coronavirus pandemic, as the reopening of the domestic and global economy allowed businesses to restart R&D projects that had been deferred or cancelled during 2020. Recorded expenditure levels were also lifted considerably by the introduction of new ONS methodologies for measuring R&D in the business and higher education sectors, which revealed a far larger R&D base than previously estimated.The business sector performed the largest share, at £55.6 billion (70% of the total), followed by higher education at £17.9 billion (23%); government performed £4.7 billion (6%) and PNPOs £1.2 billion (1%). Total R&D expenditure equalled 2.71% of GDP in 2024, marginally down from 2.72% in 2023, owing to movements in GDP rather than R&D, comfortably above the 2.4% by 2027 target set out in the 2017 Industrial Strategy, although this partly reflects the methodological revisions.Policy changes have reshaped the R&D environment over the period. The UK's association with Horizon Europe from January 2024 restored access to EU collaborative funding, while R&D tax relief was overhauled, as the merged R&D expenditure credit and enhanced R&D intensive support (ERIS) schemes replaced the previous schemes for accounting periods beginning on or after 1 April 2024. Provisional HMRC figures show total relief claimed rose by 5% to £8.2 billion in 2024-25, while the number of claims fell by 17% to 40,325, signalling that relief is increasingly concentrated among larger, R&D-intensive businesses as tighter compliance weeds out weaker claims.The 2025 Spending Review further underpinned public investment, committing £86 billion to R&D over 2026/27 to 2029/30, with annual spend rising from £20.4 billion in 2025/26 to £22.6 billion in 2029/30. However, pressures have emerged in the research base in 2026. From April 2026, UKRI split its budget into three funding categories: curiosity-driven research, government and societal priorities and support for innovative companies, while prioritisation at the Science and Technology Facilities Council has resulted in significant cuts to some areas and facilities.