The UK government primarily owes its nearly £2.9 trillion debt to a mix of domestic institutional investors, the Bank of England, and overseas investors, rather than a single country. As of 2023, roughly 30% is held by overseas investors, 30% by the Bank of England (via quantitative easing), and 39% by UK financial institutions like pension funds and insurance companies.
By the end of World War II Britain had amassed an immense debt of £21 billion. Much of this was held in foreign hands, with around £3.4 billion being owed overseas (mainly to creditors in the United States), a sum which represented around one third of annual GDP.
Who Owns All that Debt? On October 21, 2025, the nation's gross debt eclipsed $38 trillion. Of that amount, approximately 80 percent, was debt held by the public — representing cash borrowed from domestic and foreign investors.
What countries does the UK government give money to?
the top 3 recipients of UK bilateral country specific ODA were Afghanistan (£353 million), Ukraine (£342 million) and Nigeria (£110 million) the largest amount of bilateral ODA was focused on the sectors 'Refugees in Donor Countries' (£3,690 million), 'Humanitarian (£109 million) and 'Health' (£966 million)
It's difficult to pinpoint an exact figure for how much the UK owes China, as the UK doesn't track this specifically, but estimates from around 2018 suggested China held significant UK debt, potentially around 15% of overseas holdings (roughly £267 billion), primarily through Chinese financial institutions buying UK government bonds (gilts). While China is a major holder of UK debt, most of the national debt is held domestically by UK entities like pension funds, and Chinese holdings include commercial banks and institutions rather than just the Chinese state.
Most of the UK's debt (gilts) is owned by UK financial institutions like pension funds and insurance companies, followed by significant holdings from the Bank of England (via quantitative easing), and substantial amounts held by overseas investors, with UK entities holding roughly two-thirds of the total debt.
There is no independent country that is completely debt-free. Having national debt is considered normal in modern economic systems. The country with the highest national debt is Japan. The United States is not a debt-free country.
United Kingdom External Debt reached 11,016.5 USD bn in Sep 2025, compared with 10,833.0 USD bn in the previous quarter. UK External Debt: USD mn data is updated quarterly, available from Mar 1987 to Sep 2025. The data reached an all-time high of 11,999.7 USD bn in Mar 2008 and a record low of 908.7 USD bn in Mar 1987.
Around two-thirds of the total is 'day-to-day' spending on public services, such as the NHS, schools and prisons. Around a quarter of all spending is on social security, such as universal credit and the state pension.
In 2022 and 2023, the UK provided £592 million to Ukraine and £467 million to Afghanistan, making them the top recipients of UK development funding over the period.
1 United States 21,764,799 2 Euro area 18,075,643 3 United Kingdom 9,837,535 4 France 7,368,685 5 Norway 7,110,029 6 Germany 6,6,91,139 7 Japan 4,687,815 8 Netherlands 4,197,719 9 Luxembourg 3,965,300 10 Italy 2,749,75 https://www.ceicdata. com/en/indicator/norway/external-debt--of-nominal- gdp https://www.gfmag.com/ ...
We have slower income growth, so we have fewer resources with which to pay our debt. Paul Solman: That is fewer tax revenues, which would mean borrowing even more. Plus, lower growth means less demand from businesses to borrow money for investment, which also tends to lower rates.
While most advanced economies have seen their deficits and debt increase since the pandemic, the UK stands out for running persistent large deficits and a relatively high debt stock in the face of rising interest rates, slowing growth, an ageing population, and rising geopolitical and trade tensions.
There are no automatic travel bans for owing money. Creditors may still take legal action while you're abroad, such as County Court Judgments (CCJs) or involving debt collectors. Debt doesn't disappear if you move abroad. Still, creditors can continue to pursue repayment and may enforce judgments in some cases.
While UK taxes are higher than in most other English-speaking developed economies (such as Australia, Canada, New Zealand, Ireland and the United States), they are considerably lower than in most other western European countries (average tax revenue amongst the EU14.
Pie chart of UK government spending, 2023–24. The most significant area of government spending is welfare (£341 billion in financial year 2023–24), with the largest single element of this being for the State Pension, which totals £124 billion.
The EU facilitates global trade providing the UK with privileged access to over 50 markets outside of the EU through trade deals. a 500 million person market, the clout of the EU enables the UK to secure more and higher quality trade deals than it may be able to if negotiating alone.
France holds the largest consolidated national debt in Europe at around €3.3 trillion in Q1 2025, equivalent to roughly 22% of the total debt across the 28 countries analysed. Greece, despite making steady progress since its 2021 peak debt levels, still carries the highest debt‑to‑GDP ratio in Europe at 152.5%.
Ranked: Countries With the Most Government Debt in 2025
The U.S. ($38.3T) and China ($18.7T) are the two countries with the most government debt, and together make up just over half of the world's total debt ($110.9T).
The top five countries make up 67% of the world's government debt, while the top 10 make up 81%.
