Fraudulent benefit overpayments reached £9.9 billion in 2025/26, according to the Department for Work and Pensions’ latest annual report and accounts.
Although the overall overpayment rate edged down from 3.3% to 3.2% of benefit spending measured for fraud and error, the total value still increased from £9.4 billion. This was largely due to higher overall benefit expenditure during the year.
Universal Credit continued to account for the largest share of overpayments. Its overpayment rate fell from 9.5% to 8.5%, but the cash value rose from £6.2 billion to £6.7 billion.
Housing Benefit showed a clearer improvement, with overpayments falling from £1.1 billion to £800 million and the rate declining from 7.2% to 6.2%.
By contrast, Personal Independence Payment overpayments almost doubled. The value increased from £330 million to £660 million, while the overpayment rate rose from 1.3% to 2.3%.
Pension Credit recorded the highest overpayment rate of any benefit at 10%, equivalent to £620 million. This was slightly lower than the previous year’s rate of 10.3%, although the cash value increased from £610 million. State Pension overpayments also rose, from £180 million to £230 million.
The figures were published alongside the government’s review of the Personal Independence Payment system, which concluded that the current approach is no longer fit for purpose.
The DWP said its counter-fraud work prevented around £27 billion of incorrect payments during the year. It also reviewed 1.2 million Universal Credit claims, identifying and correcting around 250,000 awards and generating estimated savings of £1.1 billion.
Despite the rise in the total value of fraudulent overpayments, the department says it remains on course to reduce the overall fraud and error rate across the welfare system to 2.8% by 2028/29.
The figures highlight the scale of the challenge facing the DWP. While some individual benefit overpayment rates are falling, higher overall spending and sharp increases in areas such as PIP continue to push the total cost upwards.
