According to the Department for Work and Pensions’ (DWP) latest annual report and accounts, fraudulent benefit overpayments reached £9.9 billion in 2025/26, up from £9.4bn the previous year.

Interestingly, that increase doesn’t mean the overall rate of overpayment has gone up. In fact, the rate of benefit spending lost through fraud and error actually fell slightly, from 3.3% to 3.2%. The cash figure has increased because the Government is spending more on benefits overall.

Universal Credit still accounts for the largest amount

Universal Credit remains responsible for by far the biggest share of overpayments.

Its overpayment rate fell from 9.5% to 8.5%, but again the amount of money involved went in the opposite direction, increasing from £6.2bn to £6.7bn.

There was better news for Housing Benefit, where both figures fell. The overpayment rate dropped from 7.2% to 6.2%, while the amount overpaid reduced from £1.1bn to £800 million.

PIP overpayments almost double

One of the more striking figures is for Personal Independence Payment (PIP).

Overpayments almost doubled from £330m to £660m, with the overpayment rate rising from 1.3% to 2.3%.

The figures come alongside the Government's review of the PIP system, which concluded that the current approach is no longer fit for purpose.

Pension Credit, meanwhile, had the highest overpayment rate of any benefit at 10%, equivalent to £620m. That compares with 10.3%, or £610m, a year earlier.

State Pension overpayments also increased, rising from £180m to £230m.

What is the DWP doing about it?

The DWP says its counter-fraud work prevented around £27bn of incorrect payments during 2025/26.

It also reviewed 1.2 million Universal Credit claims, identifying and correcting around 250,000 awards. The department estimates that work alone generated savings of approximately £1.1bn.

Its longer-term target is to bring the overall level of fraud and error across the welfare system down to 2.8% by 2028/29.

There are a lot of very large numbers here, but the distinction between the percentage rate and the actual amount being lost is important. While the overall overpayment rate has edged down, increasing benefit expenditure means the cost to the public purse has still risen.

Whether the measures now being taken can reverse that trend remains to be seen.

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