Department for Work and Pensions permanent secretary Sir Peter Schofield has said the latest statistics on fraud and error in the benefits system show DWP is on track to hit a target of reducing total overpayments to 2.8% by 2028-29.
In a letter to members of parliament’s Public Accounts Committee, Schofield said preliminary data for 2025-26 showed an overpayment rate of 3.2% – down from 3.3% in 2024-25.
“We forecast that the total overpayment rate will reduce to 2.8% by 2028-29 – the lowest cross‑welfare rate since tax credits were first introduced in 2003,” he said.
He added that the statistical update “shows that we are on the right trajectory to achieving this ambition”.
The perm sec – who is due to leave post in July after 35 in the civil service – said the latest fraud-and-error estimates outperformed the Office for Budget Responsibility’s forecast, which anticipated the rate would be flat at 3.3% for the year.
Schofield said a breakdown of the key statistic shows that overpayments due to fraud alone are unchanged at 2.2%. Those due to claimant error reduced from 0.7% in 2024-25 to 0.6% last year. Overpayments due to official error were unchanged at 0.4%.
While overpayments as a proportion of total expenditure on benefits are decreasing, the monetary value of those overpayments has actually grown. Total expenditure on benefits increased from £286.6bn to £308.6bn between 2024-25 and 2025-26. As a result, the cost of overpayments increased from £9.4bn to £9.9bn.
Historically, Universal Credit accounts for the lion’s share of fraud and error in the benefits system. The 2025-26 estimates show an overpayment rate of 8.5% with the benefit, down from a peak of 14.7% in 2021-22. Schofield said the latest data demonstrated that the UC overpayment rate had outperformed the OBR’s projection of 9.1% for the last financial year.
Schofield’s letter to MPs did not make reference to overpayments in Personal Independence Payments, but the statistics show the benefit is an area where overpayments have marked a proportional increase.
PIPs are designed to help working-age people with long-term physical or mental health conditions manage the extra living or mobility costs they face.
The data shows that three in 100 PIP claims were overpaid in 2025-26, up from one in 100 the previous financial year. It said that the total PIP overpayment rate increased to 2.3% from 1.3% – with the monetary value of overpayments rising to £660m from £330m.
DWP said the rise in the overpayment rate was “almost exclusively” due to an increase in fraud.
Earlier this year, members of the Public Accounts Committee suggested that DWP’s target of reducing benefits system overpayments to 2.8% by 2028-29 was not “stretching” enough, and called for a more ambitious target to be set.
The department’s formal Treasury Minutes response to the report rejected the suggestion, saying that realising the 2.8% target would be a “remarkable achievement” and “well in excess of previous expectations of the committee”.
Fraud and error rates are the principal reason that DWP’s annual accounts have only been given a “qualified” sign off from the National Audit Office for the entirety of the department’s existence.
In its Treasury Minutes response to the February report, DWP said that ongoing work with the NAO “to agree what constitutes a cost-effective control environment” was a barrier to setting a new target until agreement is reached.