Taxpayers are losing more than £1.3 billion annually due to benefits fraud, according to recent official figures. This amount, claimed by individuals who possess savings and investments disqualifying them from welfare handouts, represents a significant increase from previous years.
In the last financial year, claimants with undeclared assets received approximately £1.3 billion in benefits. This figure has risen by over one-third since it was last calculated at £982 million for the 2021-22 financial year. The total cost to taxpayers has increased by £68 million in just one year, with fraudulent claims amounting to £1.25 billion in 2024-25. This marks the third consecutive financial year where fraudulent welfare claims have exceeded £1 billion.
These fraudulent claims constituted nearly a fifth of the £6.5 billion lost to fraud overall in the past year. The Department for Work and Pensions (DWP) data shows that hundreds of claimants are concealing cash savings and investments. Universal Credit, the primary welfare payment, has specific rules regarding savings: payments are reduced for those holding between £6,000 and £16,000, with a reduction of £4.25 for every £250 saved within that range. Individuals with over £16,000 in savings are ineligible for Universal Credit.
While the majority of the £1.3 billion bill was attributed to Universal Credit fraud, fraudulent claims for housing benefit and pension credit also contributed significantly to the taxpayer's burden. The total benefits bill is predicted to reach £333 billion this year, an increase of approximately £18 billion year-on-year.
Conservative work and pensions spokesman Helen Whately stated that the system is being "gamed" by fraudsters, undermining public trust in the welfare state. Lee Anderson, chairman of Reform UK, criticized the current administration for failing to control welfare spending and allowing fraud to proliferate.
The DWP has implemented stronger measures to combat fraud, including direct checks with banks to verify individuals' assets. A DWP spokesman asserted that the government is committed to tackling all forms of fraud and error, aiming to save £14.6 billion over the next five years. The department has already reviewed over a million Universal Credit claims and stopped £1 billion in incorrect payments. The message to those hiding savings is clear: "we will find out, stop the payments and recover money."