BackgroundPhysical inactivity increases the risk of chronic disease and mortality. The high prevalence of physical inactivity in the UK is likely to increase financial pressure on the National Health Service. The UK Biobank Study offered an opportunity to assess the impact of physical inactivity on healthcare use and spending using individual-level data and objective measures of physical activity. The objective of this study was to assess the associations between objectively measured physical activity levels and future inpatient days and costs in adults in the UK Biobank study.MethodsWe conducted an econometric analysis of the UK Biobank study, a large prospective cohort study. The participants (n= 86,066) were UK adults aged 43–79 who had provided sufficient valid accelerometer data. Hospital inpatient days and costs were discounted and standardised to mean monthly values per person to adjust for the variation in follow-up times. Econometric models adjusted for BMI, long-standing illness, and other sociodemographic factors.ResultsMean follow-up time for the sample was 28.11 (SD 7.65) months. Adults in the most active group experienced 0.037 fewer days per month (0.059–0.016) and 14.1% lower inpatient costs ( – £3.81 [ – £6.71 to  – £0.91] monthly inpatient costs) compared to adults in the least active group. The relationship between physical activity and inpatient costs was stronger in women compared to men and amongst those in the lowest income group compared to others. The findings remained significant across various sensitivity analyses.ConclusionsIncreasing physical activity levels in the UK may reduce inpatient hospitalisations and costs, especially in women and lower-income groups.Supplementary InformationThe online version contains supplementary material available at 10.1007/s10198-022-01487-1.