The UK Government has been spending more money than it receives from taxation. Thus it is running a budget deficit. In rough numbers, it spends each year about £700 billion and its income is about £580 billion. Thus each year it has been having to borrow £120 billion to meet it public sector expenditure.

Today, the total debt public sector net has now hit a record of £1305 Billion which is £1.305 trillion.

For HM Government to borrow, it issues debt instruments know as Gilts (UK Government Bonds) that is sells to investors such as pension funds, mutual funds, unit trusts etc.

To have accumulated a total debt pile of £1305 Billion, HM Government has issued hundreds of Gilts.
For example in a particular month, if HM Government needs to raise £8 Billion, it would issue Gilts with varying maturities:

£2 Billion @3% Interest (Coupon) maturing in 2020.
£1 Billion @2% Interest (Coupon) maturing in 2030.
£2 Billion @2% Interest (Coupon) maturing in 2040.
£1 Billion @1% Interest (Coupon) maturing in 2044.
£2 Billion @3% Interest (Coupon) maturing in 2065.

So it offers investors different interest rates to meet the demands of varying types in investors.

So the total £1305 Billion has been accumulated by hundreds of auctions.

Thus it is impossible to say this £1305 Billion has one interest rate, but let’s assume the £1305 Billion as an average interest rate of say 2%.
This will then tell us the interest payments HM Government has to pay on its cumulative debt pile of £1305 Billion.

£1305 Billion @ 2% = £26.1 Billion a year in debt payments.

Yes, just on an approximate basis, HM Government needs to spend £26.1 Billion a year in debt payments which clearly comes out of the £700 Billion expenditure budget. However, this £26.1 Billion adds no value to the economy, it is not building schools or creating a new university, it is dead expenditure.

The numbers are staggering. But at least we are all in it together.