The Department for Work and Pensions (DWP) has outlined its target to reduce fraud and error in the benefits system to historically low levels. Appearing before the Work and Pensions Committee, DWP permanent secretary Peter Schofield said he aims to bring fraud and error across the entire benefits system down to 2.8 per cent, which would be the lowest ever recorded.
Universal Credit overpayments reached 9.7 per cent in the 2024/2025 financial year, resulting in over £6.3 billion being incorrectly distributed. This is a significant increase from £1.7 billion in 2019/2020. Mr Schofield noted that the overpayment rate for Universal Credit was 9.4 per cent before the pandemic, peaked at 14.7 per cent in 2021/2022, and has since fallen to 9.7 per cent.
New anti-fraud measures, including bank account verification checks, have been introduced through recent legislation. These checks will initially apply to Universal Credit, Pension Credit, and Employment and Support Allowance claimants, with potential expansion to other benefits. The DWP has allocated around £300 million and deployed approximately 4,000 agents for targeted case reviews this year.
Mr Schofield also confirmed that the department will intensify efforts to prevent incorrect Pension Credit payments, which have been a longstanding issue alongside state pension underpayments. The Office for Budget Responsibility projects that these measures will reduce Universal Credit fraud and error to 4.7 per cent by 2028/2029.
