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How to Invest in BAE Systems in the UK 2025
Ruby Layram
10th Jun 2025
With ongoing global tensions, rising defence budgets, and a growing focus on national security, it’s no wonder more and more investors are turning their eyes towards BAE Systems, one of the UK’s biggest and most reliable defence contractors.
If you’re looking to invest in a company that builds fighter jets, submarines and high-grade cyber defences (all while paying dividends), then BAE Systems (LSE: BA.) might just be your next portfolio power play.
But what makes BAE an attractive investment in 2025? And how do you actually go about buying shares in it? Let’s take a look.
Also read: The best defence ETFs for June 2025
Why BAE Systems is Hot in June 2025
Let’s be honest: defence might not be the most glamorous sector, but steady profits, solid dividends, and government contracts that span decades? Now that’s sexy (at least in investor terms).
Here’s why BAE is turning heads this year:
1. Global defence spending is soaring
From Europe to Asia to the US, countries are beefing up their defence budgets amid rising geopolitical tensions.
The UK’s own military spending is now well above the NATO target of 2% of GDP. And guess who’s reaping the rewards? That’s right, BAE Systems, which is involved in everything from next-gen fighter jets to submarines and cyber defence.
2. Strong order book = predictable revenue
As of Q2 2025, BAE has a record-breaking £70+ billion order backlog. That means future income is practically baked in, which is music to investors’ ears.
In uncertain times, few things beat a business with locked-in government contracts.
3. Dividend growth
BAE has a reputation for reliable dividend payments, increasing its dividend for 20 consecutive years.
As of June 2025, the dividend yield is hovering around 3.2%, and it’s well covered by earnings. It’s a great option for income seekers as well as growth-focused investors.
4. BAE is going green (ish)
The company is increasingly investing in sustainable defence technologies such as electrification, low-emission ships, and AI-powered security systems. This helps it stay relevant in a world where ESG matters more than ever.
How to Invest in BAE Systems (Step-by-Step)
Thinking of hopping on the BAE bandwagon? Here’s a simple breakdown of how to do it:
Step 1: Open a Trading Account
You’ll need an investment platform or share dealing account that lets you buy UK shares. Popular choices include:
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Freetrade
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Hargreaves Lansdown
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AJ Bell
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Trading 212
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eToro (Just check if they charge commission or offer fractional shares.)
For hands-off investing, you could also look at a stocks and shares ISA, ideal if you want your BAE shares to grow tax-free!
Step 2: Search for BAE Systems
Once you’re signed up and verified, type in “BAE Systems” or the ticker symbol BA. into your platform’s search bar. You’ll see the current share price and other info.
Step 3: Decide How Much to Invest
Shares are typically priced around £12–£14 per share (as of mid-2025), but this can fluctuate. You can choose to invest a fixed cash amount (e.g. £500) or buy a set number of shares (e.g. 40 shares). Some brokers also let you buy fractional shares, so don’t worry if you’re starting small.
Step 4: Place Your Order
You’ll usually have two options:
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Market order: Buys shares immediately at the current market price.
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Limit order: Lets you set a specific price to buy in at.
For beginners, a market order is quick and easy. Just confirm the number of shares, hit “buy,” and you’re in!
Step 5: Sit Tight and Watch It Grow (or Add to It Over Time)
Keep an eye on your investment, especially when BAE reports earnings or announces new contracts.
Many investors choose to buy and hold, reinvesting dividends to build their position over time.
Top Tips Before You Buy
BAE Systems is a promising company to back in June 2025. Here are a few things to keep in mind before you invest.
- Diversify. Even a solid stock like BAE should be part of a broader portfolio, not your only holding.
- Keep it long term. This isn’t a meme stock. BAE is best suited for long-term investors who want consistent growth and income.
- Read the news. Defence contracts are often influenced by political events, so a basic awareness of global affairs helps.
Don’t Forget: Tax & ISA Options
If you’re investing outside of a stocks & shares ISA, you may be liable for capital gains tax if your profits exceed the annual allowance (£6,000 for 2025/26). Dividends above your tax-free threshold may also be taxed.
That’s why many UK investors prefer to buy BAE shares through an ISA, where gains and dividends are completely tax-free.
Final Thoughts
While it’s not every day you get to invest in submarines, fighter jets, and military AI, BAE Systems offers just that, with a healthy helping of dividends and long-term growth potential.
Whether you’re new to investing or simply looking to add some stability to your portfolio, BAE Systems remains one of the FTSE 100’s standout stars in 2025.
If you’re keen to keep on top of the latest investing news why not sign up to our fortnightly MoneyMagpie Investing Newsletter? It’s free and you can unsubscribe at any time.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. Companies listed above are not necessarily endorsed by Money Magpie. When investing your capital is at risk.
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