UK Auditor: £9.9 Billion in Benefit Overpayments Last Year as DWP's Accounts Are Qualified for a 38th Straight Year
The National Audit Office's overview finds fraud made up £6.8 billion of overpayments, while £4.9 billion was underpaid to people entitled to more.
Original reporting from public records by Watchman Report staff ·
The UK's Department for Work and Pensions spent £319.9 billion in 2025-26, up about 7% from £298.0 billion the year before, according to the National Audit Office's overview of the department published Oct. 13, 2026.
The NAO reports that DWP overpaid an estimated £9.9 billion in benefits, 3.2% of benefit spending, compared with £9.4 billion (3.3%) in 2024-25. Of that, £6.8 billion was fraud, £2.0 billion was claimant error and £1.1 billion was official error. Universal Credit accounted for £6.7 billion of the overpayments, about 68%, though its overpayment rate fell from 9.5% to 8.5%. Excluding the State Pension, the overpayment rate was 6.0%, or £9.7 billion.
The overview also finds that people were underpaid an estimated £4.9 billion (1.6%), compared with 1.7% the year before. Of that, £1.2 billion was official error and £3.7 billion was "unfulfilled eligibility," which the NAO says is highest for disability benefits.
The Comptroller and Auditor General gave DWP's accounts a clean "true and fair" opinion but qualified the regularity opinion because of the material level of fraud and error. According to the overview, it was "the 38th consecutive year in which DWP's accounts had been qualified due to material fraud and error." DWP has set a new ambition to bring overpayments down to 2.8% by 2028-29.
Watchman Report read the National Audit Office's "Department for Work & Pensions 2025-26" overview page and the full PDF, published Oct. 13, 2026. All figures are the NAO's. The overview gives the spending increase as 7% in its summary and 7.3% in its detailed figures.
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