Over £9 billion in benefits are estimated to have been overpaid over the past year due to fraud and error, a figure one government minister has called "staggering".
Official statistics reveal the total overpaid benefit expenditure reached £9.5 billion in the year ending March, with fraud accounting for the majority. Meanwhile, an estimated £1.2 billion was underpaid during the same period, according to Department for Work and Pensions (DWP) figures.
Fraudulent claims contributed £6.5 billion to the total overpayments, a decrease from £7.3 billion the previous year. However, overpayments due to claimant error rose to £1.9 billion, up from £1.6 billion, while official errors also increased, reaching £1 billion from £0.8 billion.
Overpayments specifically related to Universal Credit saw a slight decrease, falling to £6.35 billion from £6.41 billion.
DWP said people under-declaring their earnings remained the main cause of fraud overpayments, followed by benefits claimants failing to declare living with a partner, and thirdly people under-declaring their financial assets or capital.
The department said it was able to recover some £1.1 billion of overpayments in the past year – £0.4 billion in housing benefit and the same amount in universal credit.
While the overall figure fell from £9.7 billion in the previous year, it was still described as “staggering” by minister Andrew Western.
In a written statement published alongside the figures on Thursday, he said: “This Government made a manifesto commitment that it will safeguard taxpayers’ money and not tolerate fraud or waste anywhere in public services.
“With welfare benefits paid to around 24 million people, the welfare system is a deliberate target for both organised crime groups and opportunistic individuals and it is vital that the Government continues to robustly tackle fraud to ensure support goes to those who need it most.
“We are taking further steps to minimise error, ensuring the right people are paid the right amount at the right time.”
The figures came as the Public Authorities (Fraud, Error and Recovery) Bill moved to the House of Lords for its second reading on Thursday.
Its proposed reforms have been billed as delivering the “biggest ever crackdown on fraud against the public purse”.
The Bill seeks to curb multibillion-pound benefit fraud and includes allowing the DWP to recover money directly from fraudsters’ bank accounts.
It would also allow the DWP to have the power to obtain bank statements from people they believe have enough cash to pay back welfare debts but are refusing to do so.
Courts could also suspend fraudsters’ driving licences after an application by the DWP, if they owe welfare debts of more than £1,000 and have ignored repeated requests to pay them back.
In the Commons, a group of Labour MPs rebelled to support an amendment designed to curb Government powers to verify a person’s benefit eligibility and the Liberal Democrats warned the Bill could result in “Orwellian levels of mass surveillance of those who have means-tested benefits”.
The DWP figures also show that fraudulent claims for Personal Independence Payments (PIP) “remained at 1 in 100 claims” in 2025, which was the same as in 2024. The health-related benefit is at the heart of Labour’s recently announced welfare reforms, making up £4.1 billion of the £6.4 billion savings.
Disability advocate and founder of Purpl, Georgina Colman, said the statistics “show how misdirected the cuts are.”
“It’s clear that the majority of people claiming benefits like PIP are in need, so it's frustrating to see the harshness of the welfare cuts.
“PIP and other benefits are for the most vulnerable in society and taking away these lifelines could be counterproductive and leave people worse off.”
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