Committee publication · Correspondence · 18 May 2026
Letter from the Permanent Secretary at the Department for Work and Pensions relating to Fraud and Error Estimates and Unfulfilled Eligibility in the Benefit System, 14 May 2026
Summary
The Permanent Secretary at the Department for Work and Pensions writes to the PAC Chair to report on fraud and error statistics for the financial year ending 2026. The department claims its control-strengthening approach has reduced the overall overpayment rate to 3.2% (£9.9bn), outperforming OBR forecasts, with Universal Credit overpayments falling to 8.5% from a 2021-22 peak of 14.7%. The government commits to £14.6bn in savings by 2030-31 through targeted case reviews and the Public Authorities (Fraud, Error and Recovery) Act.
Key findings
- Overall overpayment rate reduced to 3.2% (£9.9bn) in 2025-26 from 3.3% (£9.4bn) in 2024-25, outperforming OBR's 3.3% forecast and moving toward a target of 2.8% by 2028-29.
- Universal Credit overpayment rate fell to 8.5% from 14.7% peak in 2021-22; OBR-certified forecast projects further reduction to 7.5% by 2028-29, already outperforming the 9.1% 2025-26 projection.
- Fraud overpayments remain at 2.2%, claimant error reduced to 0.6% from 0.7%, and official error steady at 0.4%; underpayment rate stable at 0.4% (£1.2bn).
- Unfulfilled Eligibility rate decreased to 1.2% (£3.7bn) in 2025-26 from 1.3% in 2024-25, measuring benefits customers could have received with correct circumstance disclosure.
- Government commits to £14.6bn savings by 2030-31 through Targeted Case Reviews, Pension Credit Case Reviews, and the Public Authorities (Fraud, Error and Recovery) Act (estimated £2.1bn benefit by 2030-31), with new data-sharing powers with banks and financial institutions to identify overpayments earlier.
Tone
SupportiveTopics
Key actors
Sir Peter Schofield KCB, Department for Work and Pensions, Sir Geoffrey Clifton-Brown MP, Public Accounts Committee, Office for Budget Responsibility
Notable line
“… the total overpayment rate will reduce to 2.8% by 2028–29 — the lowest cross ‑ welfare rate since tax credits were first introduced in”
Key Quotes
“Our approach to reducing fraud and error is working, with overpayments forecast to reach historic lows.”
“This has outperformed the OBR's forecast which estimates the rate would have been 3.3% for this year.”
“Through recent Budgets, this government has committed to deliver savings of £14.6 billion up to the end of 2030-31.”
“Powers contained within the Act will address overpayments in the social security system, be tough on criminals, fair for claimants and will safeguard public money by reducing public sector fraud and error.”
Source · parliament.uk record ↗