Fraud and Error in the Benefit System

Statement

My honourable Friend, the Parliamentary Under Secretary of State (Minister for Transformation) (Andrew Western MP) has made the following Written Statement.

The annual statistics for Fraud and Error in the Benefit System for the financial year ending 2025, were published on Thursday 15 May 2024, at 9.30am.

Today's figures confirm the overall rate of overpayments is now 3.3% (£9.5bn) for 2024/25, compared to 3.6% (£9.7bn) in 2023/24. Overpayments due to fraud account for 2.2% compared to 2.7% last year while claimant error and official error are now at 0.7% and 0.4% respectively, compared to 0.6% and 0.3% last year.

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 total rate of benefit expenditure underpaid in FYE 2025 was 0.4% (£1.2bn), compared with 0.4% (£1.1bn) in FYE 2024.

Through Autumn Budget 2024 and Spring Statement 2025, the Department has committed to deliver £9.6bn in scored savings out to 2029/30. This will be delivered through a suite of measures, including additional resourcing for the Verify Earnings and Pension Service which uses HMRC data to identify changes in claimants’ earnings and private pensions that may impact entitlement to Carer’s Allowance and Pension Credit, and new verification measures for capital and self-employed income and expenses across Universal Credit claims.

As part of this, the Public Authorities (Fraud, Error and Recovery Bill), which moves to second reading in the House of Lords today, is estimated to deliver benefits of £1.5bn over the next five years. It will safeguard public money by reducing public sector fraud and error and allowing the more effective recovery of monies owed to government. The Bill will also help spot and stop errors earlier to avoid claimant’s getting into debt. The latest fraud and error in the benefit system statistics show overpayments at a staggering £9.5bn in the last year, with capital remaining one of the top reasons for overpayments in UC and PC. This demonstrates the continued importance of the Eligibility Verification Measure, which is a core part of the Bill.

Today we have also published our Unfulfilled Eligibility statistics, following last year’s reclassification from customer error underpayments. Unfulfilled Eligibility measures how much a customer could have been eligible for had they told us their correct circumstances. The total unfulfilled eligibility rate in FYE 2025 was 1.3% (£3.7bn) compared with 1.2% (£3.1n) in FYE 2024.

The Department will report more on both overpayments and underpayments by way of its Annual Report and Accounts, which are due to be published in July 2025.