DWP Launches New Universal Credit Fraud Campaign Targeting £9.5bn Overpayments

The Department for Work and Pensions will launch a new campaign at the end of January 2026 targeting Universal Credit fraud, focusing on three key areas responsible for the majority of benefit overpayments. The initiative comes as official figures reveal that incorrect payments to claimants reached £9.5 billion in the 2024/25 financial year, representing 3.3% of total benefits expenditure.

According to a written response from DWP Minister Andrew Western to Labour MP Callum Anderson, the campaign will concentrate on "living together, self-employed, and capital and savings"—identified as the three greatest loss areas for the Department. The multi-channel approach will include on-demand video, digital display, paid search, and social media advertising to reach Universal Credit recipients.

Background and Context

The latest Fraud and error in the benefit system report shows a slight improvement from the previous year, when overpayments totalled £9.7 billion (3.6%). The DWP provides benefits to approximately 23.7 million people across Great Britain, with more than 8 million receiving Universal Credit—a means-tested benefit typically paid monthly.

The campaign aims to address two critical communication objectives: increasing awareness of the consequences of not reporting changes in circumstances, and improving understanding of which changes must be declared among Universal Credit customers. The DWP emphasises that accurate and timely reporting is essential for calculating correct entitlement levels.

Key Figures and Entities

DWP Minister Andrew Western, in his capacity as a government minister, confirmed the campaign's focus areas and timeline in his official response to parliamentary questioning. The department itself manages the UK's welfare system, with Universal Credit representing one of its largest and most complex programmes.

The campaign follows ongoing concerns about benefit fraud across the political spectrum, with MPs from multiple parties seeking information about the effectiveness of public information campaigns in reducing fraud levels. The DWP's strategy acknowledges the complexity of the Universal Credit system, which requires claimants to report approximately 20 different types of changes in circumstances.

Legal and Financial Mechanisms

Universal Credit operates as a means-tested benefit where entitlement amounts depend on personal circumstances. The system requires claimants to promptly report changes including employment status, living arrangements, health conditions, and financial resources such as savings and investments.

According to DWP guidance, failing to report changes "as soon as they happen" can result in overpayments that must be repaid, potentially affecting entire assessment periods rather than just the period from when changes are reported. The consequences of non-compliance range from repayment requirements to court proceedings and penalty fines.

The three targeted areas reflect systemic vulnerabilities in the benefits system. "Living together" refers to cohabitation situations that can affect entitlement, while "self-employed" status requires accurate income reporting. "Capital and savings" declarations impact means-testing calculations, with thresholds determining eligibility levels.

International Implications and Policy Response

While the UK's Universal Credit system is unique in its design, the challenge of benefit fraud and error reflects a global issue confronting welfare states. The £9.5 billion figure represents not just financial loss but also raises questions about system design and administrative efficiency.

The DWP's focus on public information campaigns acknowledges that technical solutions alone cannot address all instances of fraud and error. The emphasis on claimant education reflects an understanding that the complexity of modern welfare systems creates inadvertent non-compliance alongside deliberate fraud.

The campaign's effectiveness will likely be monitored through future fraud and error reporting, with policymakers seeking to balance enforcement with access to benefits for those genuinely entitled to support. The slight reduction in overpayment rates from 3.6% to 3.3% suggests previous measures have had some impact, but substantial losses persist.

Sources

This report draws on the Department for Work and Pensions' annual Fraud and error in the benefit system publication, official Universal Credit guidance, and parliamentary correspondence regarding benefit fraud prevention strategies.