Benefit fraudsters who conceal savings, investments and other financial assets are costing British taxpayers more than £25 million every week, according to official figures that reveal a sharp rise in welfare fraud linked to undeclared capital.
Data published by the Department for Work and Pensions (DWP) show that an estimated £1.325 billion was wrongly paid out during the 2025-26 financial year to claimants who failed to declare savings and assets that could have affected their entitlement to benefits.
The figure equates to around £25.5 million every week and marks the highest level recorded for this type of fraud.
The latest total represents an increase of more than a third compared with four years earlier, when losses linked to hidden savings and capital were estimated at £982 million. The amount also rose by approximately £68 million compared with the previous financial year.
Under current benefit rules, claimants with savings above £6,000 may see their payments reduced, while those with capital exceeding £16,000 are generally not eligible for means-tested benefits such as Universal Credit. Despite these rules, official estimates suggest some claimants have continued to receive welfare payments while failing to disclose substantial sums held in bank accounts, investments and other assets.
Universal Credit accounted for the largest share of the losses, with more than £1 billion of the estimated fraud linked to hidden capital occurring within the flagship benefit. Housing Benefit and Pension Credit fraud made up much of the remainder.
The figures form part of the DWP’s wider assessment of fraud and error across the welfare system. The department estimates that total benefit overpayments caused by fraud and error amounted to £9.5 billion in the financial year ending 2025, equivalent to 3.3 per cent of total benefit expenditure. Fraud alone accounted for a significant proportion of those losses.
The DWP calculates its estimates by examining a statistically representative sample of benefit claims. Investigators review claimants’ circumstances, including bank account information and supporting evidence, before applying the findings across the wider benefits system. Around 12,900 claims were sampled for the latest assessment.
The issue has become a growing focus for ministers as welfare spending continues to rise. The DWP currently pays benefits to more than 23 million people across Great Britain, making the system a major target for both organised fraud and individuals seeking to exploit loopholes.
In response, the Government has introduced tougher anti-fraud measures through the Public Authorities (Fraud, Error and Recovery) Act 2025, which grants investigators greater powers to obtain information from banks and financial institutions when checking eligibility for benefits. The legislation is designed to help identify claimants who have failed to disclose savings and recover money that has been wrongly paid out.
The DWP says its Targeted Case Review programme has already examined more than one million Universal Credit claims and identified significant levels of incorrect payments. Parliamentary committees have also noted that new anti-fraud powers are expected to strengthen the department’s ability to tackle welfare abuse and recover public money.
Several recent prosecutions have highlighted the scale of the problem. In one case, a woman received more than £40,000 in Universal Credit over several years while holding substantial savings in undisclosed accounts. In another, a claimant continued receiving benefits after inheriting tens of thousands of pounds that should have been declared to authorities.
The figures have sparked criticism from opposition politicians, who argue that more needs to be done to tackle abuse of the welfare system.
Reform UK MP Lee Anderson said:
“These figures are shocking. While millions of hardworking Britons do the right thing and pay their taxes, benefit fraudsters are laughing all the way to the bank at the public’s expense.
“Labour has shown it is incapable of getting a grip on a welfare system that is being exploited on an industrial scale.
“Reform UK would crack down on benefit fraud and ensure taxpayers’ money only goes to those who genuinely need it.”
Meanwhile, Conservative Shadow Minister Helen Whately said:
“Billions of pounds of taxpayers’ money is lost to benefit fraud each year. People are abusing and gaming our welfare state, and this undermines public trust in it.
“After two years in office, Labour is failing on welfare reform, failing on welfare savings and so far they have been failing to stop welfare fraud too.
“The Conservatives would take the hard choices Labour are flunking. We will make £23bn of savings and deliver a welfare state that is there for those who genuinely need it.”
The Government has defended its approach, pointing to new anti-fraud measures introduced through the Public Authorities (Fraud, Error and Recovery) Act 2025, which gives investigators greater powers to obtain information from banks and financial institutions when checking benefit eligibility.
Ministers say the measures form part of a wider plan to save £14.6 billion over the next five years by reducing fraud and error across the welfare system.
The latest figures suggest undeclared savings and assets have become one of the most significant sources of welfare fraud in Britain. With losses now exceeding £1.3 billion a year, pressure is likely to grow on ministers to prove that tougher anti-fraud powers can protect taxpayers’ money while ensuring support reaches those who genuinely need it.
