More than two-thirds of UK businesses have said they plan to increase cybersecurity spending over the next 12 months as AI adoption and geopolitical uncertainty reshape technology budgets.

According to the Q1 2026 Barclays Business Prosperity Index, 68% of UK business leaders expect to increase cybersecurity investment, while 46% believe new technologies are increasing their exposure to cybersecurity risks.

Cyber Spending Moves Up the Agenda

The index found that fewer than three in 10 businesses are confident in their ability to respond to a major cyber incident. Barclays said recent global turmoil has pushed resilience higher on the agenda, with firms reassessing investment plans during a quarter marked by intensifying geopolitical risk.

Large firms have moved fastest. More than a third of large businesses have increased cybersecurity investment since the start of 2026, compared with 26% of small businesses and 4% of micro businesses.

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Average cybersecurity spending among decision makers has reached £505,000 ($680,000) so far in 2026, Barclays said. The figure rose to £1.3m ($1.75m) for large businesses, compared with £134,000 ($180,000) for small businesses and £15,000 ($20,000) for micro businesses.

Businesses identified several cyber-related concerns:

• Damage to customer trust and confidence (28%)

• Operational disruption or downtime (27%)

• Loss of revenue (26%)

• Loss of sensitive data or intellectual property (33%)

Matt Hammerstein, CEO of Barclays UK Corporate Bank, said UK businesses are operating in an environment where "uncertainty has become the norm."

"What's striking, however, is how businesses are responding. Rather than pulling back entirely, many are adapting to this new reality by tightening financial discipline, managing cash carefully and prioritizing investment where it strengthens resilience, productivity and long-term competitiveness," Hammerstein said.

Agentic AI Use Expands

AI and automation are also becoming more embedded across UK businesses. Barclays found that 52% of firms say AI and automation have improved productivity, while 61% now proactively use agentic AI in their operations.

Cloud, cyber and AI together account for 44% of planned technology budgets over the next year. Over the next two years, firms said they plan to use AI for data analysis and forecasting (38%), administrative automation (31%), customer experience (29%) and cybersecurity (29%).

Concerns remain around adoption. Barclays said 26% of firms cited the accuracy and reliability of AI outputs as a worry, while 24% flagged data security and cybersecurity risks.

Abdul Qureshi, head of Barclays Business Banking, said AI is beginning to present "tangible opportunities" for small and medium-sized enterprises, particularly where it can improve productivity and make routine work more efficient.

The index is based on research among 1,000 senior business decision-makers, conducted by Opinium Research between April 17 and May 5, 2026. It also includes research among 500 B2B leaders, conducted by Focaldata between April 27 and May 1, 2026.