The UK government's 2026 Sectoral Analysis counts 275 digital identity firms and £2B in revenue — but with GVA up 17% while headcount fell 6%, the real story is a maturing, consolidating market where credential verification and age assurance are the growth wedges.
The headline
The UK government has published its most complete measurement of the domestic digital identity industry to date. The Digital Identity Sectoral Analysis Report 2026 — from the Department for Science, Innovation and Technology (DSIT) and the Office for Digital Identities and Attributes (OfDIA), researched by Perspective Economics and Survation — counts 275 firms providing digital identity products and services in the UK as of January 2026, generating an estimated £2.03 billion in annual revenue and £1.04 billion in Gross Value Added.
On its face, that's a growth story. Read the second line, and it's a consolidation story.
The tell: value up, headcount down
GVA rose £149M (+17%) over the baseline, and GVA per employee reached £107,800 — roughly 46% above the UK workforce average. But employment fell 6%, from 10,246 to 9,624 full-time equivalents, and the firm count grew only net +9 (+3%) to 275 (233 dedicated providers, 42 diversified).
More value, from fewer people, at a stable number of firms, is the signature of a maturing market: automation absorbing manual verification work, and consolidation concentrating revenue. The report itself points to the M&A driving it — GBG's acquisition of DataTools (October 2025), plus the absorption of TrustID and Keyless. The UK identity market is getting more productive and more concentrated at the same time.