The Division for Work and Pensions (DWP) has printed new figures
DWP confirms one group will likely be exempt from new fraud powers
The Division for Work and Pensions (DWP) has launched new figures revealing that billions of kilos had been incorrectly distributed throughout the advantages system final yr. The most recent Fraud and Error within the Profit System report estimates 3.2 per cent of profit expenditure was overpaid within the monetary yr ending 2026 (down from 3.3% in 2025), equal to £9.9 billion.
An extra 0.4 per cent was underpaid, value £1.2bn. The DWP said that underpayments featured within the report happen because of official error, together with errors or delays by the division, an area authority or HM Income and Customs (HMRC). The DWP supplies advantages to roughly 24.3 million folks and complete profit expenditure reached £308.6bn within the monetary yr ending 2026, up from £286.6bn the earlier yr.
The report is based upon a pattern of profit claims scrutinised for accuracy by a specialist crew. The claims had been sampled between September 2024 and October 2025.
A DWP spokesperson advised the Each day File: “We’re decided to deal with fraud and error within the system and at simply 3.2 per cent the general fee is at its lowest for the reason that pandemic.
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“Our new Fraud Act provides us powerful new powers to go after cheats and claw again taxpayers’ cash – together with accessing new knowledge from banks to assist discover incorrect funds.
“We have additionally secured plenty of high-profile latest convictions of individuals committing PIP and Common Credit score fraud – proof our sustained efforts are working.”
Pension Credit score and PIP stand out
The information reveals contrasting issues throughout varied advantages. Common Credit score stays the most important supply of overpayments in financial phrases, Pension Credit score carries the best overpayment fee relative to expenditure, whereas Private Independence Cost (PIP) recorded a statistically important improve in overpayments.
The State Pension continues to register the bottom overpayment fee, but underpayments stay appreciable owing to the dimensions of spending and chronic Nationwide Insurance coverage document problems.
Common Credit score
Common Credit score remained the most important contributor to overpayments in money phrases. The DWP estimated 8.5 per cent of Common Credit score spending was overpaid within the monetary yr ending 2026, value £6.72bn. This represented a fall from 9.5 per cent the earlier yr, though the DWP famous the change was not statistically important.
Common Credit score spending rose from £65.3bn to £79.2bn, which means financial figures can’t be immediately in contrast throughout the 2 years.
The report revealed that 24 in each 100 Common Credit score claims had been both overpaid or underpaid, whereas 21 in each 100 had been overpaid. Fraud represented £5.42bn of Common Credit score overpayments, with claimant error accounting for £690m and official error totalling £610m.
The principal drivers of Common Credit score fraud overpayments had been earnings and employment, residing collectively guidelines and capital, which collectively represented greater than £6 in each £10 overpaid owing to fraud.
The report said that earnings and employment fraud, together with beneath declaration of earnings from work, dropped from 2.2 per cent to 1.5 per cent.
Common Credit score underpayments had been estimated at 0.4 per cent, totalling £350m.
State Pension
State Pension had the best expenditure of any DWP profit at £146.1bn, representing just below half of complete profit spending.
The State Pension overpayment fee stood at 0.2 per cent, totalling £230m. DWP said that is constantly the bottom overpayment fee of all DWP advantages.
State Pension underpayments remained at 0.3 per cent, totalling £390m. The report said that Nationwide Insurance coverage contribution errors remained the most important trigger for State Pension underpayments, with issues regarding historic Residence Tasks Safety comprising £6 in each £10 underpaid owing to contribution errors.
Residence Tasks Safety existed between 1978 and 2010 to safeguard the State Pension entitlement of individuals with home caring tasks.
Pension Credit score
Pension Credit score had the best overpayment fee relative to expenditure for the second yr working. The overpayment fee stood at 10 per cent, valued at £620m, in contrast with 10.3 per cent, valued at £610m, the previous yr.
The proportion of Pension Credit score claims overpaid rose from 28 in 100 to 33 in 100. DWP said this was statistically important and represented the third successive yr that Pension Credit score had the best proportion of claims being overpaid.
However, the report indicated most Pension Credit score overpayments had been comparatively modest, with greater than half of overpaid claims involving lower than £10 per week.
Capital and overseas guidelines remained the 2 major causes of Pension Credit score overpayments, representing greater than £5 in each £10 overpaid.
Claimant error related to capital elevated from 1.8 per cent to 2.5 per cent. Pension Credit score underpayments had been calculated at 1.3 per cent, valued at £80m. The principal purpose was official error involving further quantities, predominantly related to unpaid Additional Quantity for Extreme Incapacity.
Private Independence Cost (PIP)
Private Independence Cost witnessed some of the hanging adjustments on this yr’s report.
The PIP overpayment fee climbed to 2.3 per cent, valued at £660m, from 1.3 per cent, valued at £330m, the previous yr. DWP said this was a statistically important improve.
The proportion of PIP claims overpaid additionally climbed from one in 100 to 3 in 100.
Purposeful wants, the place claimants did not report an enchancment of their wants, remained the principal explanation for PIP overpayments and represented greater than £7 in each £10 overpaid on PIP. Fraud was the first issue driving the rise. PIP fraud overpayments rose to 1.4 per cent, value £410m, up from 0.4 per cent, value £100m.
Nonetheless, the report additionally attracts consideration to a separate “Not Fairly Anticipated To Know” class. These are situations the place a claimant was incorrectly overpaid, but the DWP concluded they may not fairly have been anticipated to know they had been required to report the change.
The worth of PIP circumstances excluded from overpayment estimates beneath this class climbed to £1.03bn, up from £500m the earlier yr.
PIP underpayments remained at 0.2 per cent, value £70m. All PIP underpayments recorded within the report had been attributable to award dedication, which means an incorrect entitlement choice made by the DWP.
Housing Profit
Housing Profit overpayments dropped significantly. The overpayment fee fell to six.2 per cent, value £800m, down from 7.2 per cent, value £1.1bn, the earlier yr.
The proportion of Housing Profit claims that had been overpaid additionally decreased from 17 in 100 to fifteen in 100.
The DWP attributed the decline primarily to reductions in pension age Housing Profit overpayments, together with non-passported pension age claims.
Capital, referring to the under-declaration of monetary property, remained the main explanation for Housing Profit overpayments, accounting for greater than £4 in each £10 overpaid.
Housing Profit underpayments had been estimated at 0.3 per cent, value £40m.
Incapacity Residing Allowance
The speed of inaccurate Incapacity Residing Allowance (DLA) claims has greater than doubled, rising from 4 in each 100 claims to 9 in each 100, in contrast with figures final recorded within the monetary yr ending 2024.
The DLA overpayment fee stood at 0.9 per cent, valued at £70m, whereas underpayments climbed to 2.3 per cent, amounting to £190m.
The DWP confirmed that every one DLA underpayments recorded on this yr’s report had been attributable to award dedication.
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