Today we published our second annual sectoral analysis of the UK digital identity market. This analysis covers services registered under the provisions in the Data (Use and Access) Act 2025, as well as those in the wider market.
Last year’s report gave us a baseline for understanding the size and shape of the digital identity market, along with the use of digital identity services in the UK. This year’s report helps us see what has changed.
This year’s report highlights growth in the sector’s revenue and use cases. Additionally, providers have increased the varieties of services offered and this has been met with increased understanding and use of digital identity by the public.
Digital identity services are already used in many everyday situations. You can use them when you are opening a bank account or applying for credit; when you need to prove your right to work, when renting or buying a property, accessing public services, completing checks for regulated sectors, or proving your age online.
What is the sectoral analysis?
The annual digital identity sectoral analysis gives government, industry and the public a shared evidence base for understanding and discussing how the digital identity sector in the UK is developing over time.
This year’s report was produced on the back of independent research by Perspective Economics and Survation. It updates the 2025 baseline across market size, provider activity, adoption and consumer attitudes.
As with any technology market, the findings need to be read carefully. Some of the economic figures, including revenue, employment and Gross Value Added, are modelled estimates rather than directly observed totals. The consumer survey has been expanded and weighted since last year, with some revised use cases. These facts improve the robustness of this year’s findings, but means some year-on-year comparisons should be treated with caution.
More productive and varied, but changing
The report estimates that there are now 275 firms providing digital identity products and services in the UK. That is a net increase of 9 firms since the 2025 baseline.
The sector generated an estimated £2 billion in annual revenue in 2024 to 2025. This is slightly lower than the baseline estimate, but the report explains that much of this change is linked to a methodological adjustment to one firm. Excluding that adjustment, estimated revenue across the rest of the market grew by around 4%.
Productivity has risen. Estimated Gross Value Added reached £1 billion, up 17% from the baseline. GVA per employee rose to around £107,800, up from £86,600 last year.
At the same time, estimated employment fell from 10,246 to 9,624 full-time equivalent roles. The report suggests several possible explanations for this, including market consolidation, automation, broader technology sector pressures, and changes in how digital identity activity is classified within larger firms.
Use cases, technologies and customer needs are developing
The report also looks at where digital identity services are being used.
The most commonly reported use cases include Know Your Customer and Anti-Money Laundering checks, fraud prevention, secure access management, right to work checks, employee background screening and age verification for online services.
Use of digital identity services in the healthcare sector and in public services has increased notably, with 72% of firms reporting some use, up from 58% in 2025. This suggests that digital identity services are being used across a broader range of sectors than many people might expect.
Financial and professional services remain the largest customer sector, with 90% of digital identity service providers reporting at least one customer in this area.
Providers also appear to be broadening what they offer. Professional and credential verification rose from 28% to 55% of firms, while age assurance rose from 23% to 31%.
More familiar to consumers...
This year’s report includes an expanded consumer survey of 5,658 UK consumers, conducted by Survation in November 2025.
The survey found that 81% of respondents reported some level of understanding of digital identity, up from 71% at baseline. The proportion reporting limited or no understanding fell from 29% to 19%.
It also found that 77% of respondents reported having used a digital identity service for at least one purpose.
The findings suggest that digital identity is becoming more present in people’s everyday interactions. The most common digital use cases included setting up or managing insurance policies, applying for credit, opening a bank account, property checks and right to work checks.
One interesting finding is that people may use digital identity services without always thinking of them in those terms. For example, someone opening a bank account or completing an employment check may experience the process as part of that bank or employer’s service, rather than as a separate digital identity interaction.
We think that distinction matters when we are assessing public understanding.
...but not necessarily more trusted
The survey shows that attitudes towards digital identity are mixed.
Consumer preference for digital identity is strongest in online contexts. For example, 39% of respondents would prefer to use digital identity for age-restricted online purchases, and 36% would prefer it for accessing public services.
The report also found that 71% of respondents believe digital identity services will be important over the next five years. However, only 43% view the current direction of digital identity development positively.
That gap is important. It suggests that many people expect digital identity to become more significant, but do not necessarily feel fully confident about how it is developing.
For us, that reinforces the importance of trust, privacy, security, transparency and inclusion; principles at the heart of the UK digital verification services trust framework. A digital identity market can only work well if people have confidence in the digital products and processes they engage with, and are not excluded from essential services by having used a digital solution instead of a physical document like a passport or driving licence.
Inclusion remains a priority
Among people who had not used digital identity services, the most common reasons were that they preferred using physical ID, or that they had not had to prove their identity on any occasion they could remember.
But access barriers also remain. Some non-users said no digital option had been provided, while others said they did not have the right documents, were not comfortable using the technology, or had privacy and security concerns.
Digital identity can make some services easier and more accessible, but only if services are designed around people’s real lives. That includes people with lower digital confidence, lower digital access, fewer identity documents, disabilities, or other circumstances that make standard verification routes harder.
Designing services around people’s real lives also means recognising that non-digital routes remain important.
What we are taking from this year’s report
A few things stand out from this year’s analysis.
- The market appears to be maturing. The findings suggest stronger productivity, broader provider offerings and continued international activity.
- Digital identity is becoming more embedded across the economy. It is already part of many everyday checks and transactions, even where users may not describe it as digital identity.
- Public trust cannot be assumed. Use and understanding appear to be increasing, but confidence as well as concerns about privacy, security and inclusion remain central.
- We need to keep treating the evidence we gather carefully. Some measures are estimates, some comparisons are not direct, and the market itself is still evolving.
That is exactly why we are publishing this sectoral analysis. It helps us work in the open, test our understanding, and build a clearer evidence base over time.
Towards the next report
We will continue to repeat this research into the digital identity market annually. Future reports will help us understand whether the trends identified this year continue. It will also help us plot productivity growth, international activity, consumer adoption, inclusion challenges, and emerging use cases.
We are grateful to Perspective Economics and Survation for their work, and to the digital identity providers and stakeholders who contributed to the process.
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