UK welfare fraud and errors cost £10 billion a year, OBR found
Why it matters: The watchdog said four-fifths of the losses were fraud, with wrongful universal credit inactivity claims hitting £3.9 billion.
Fraud and administrative errors in Britain’s welfare system cost taxpayers about £10 billion a year, the Office for Budget Responsibility found in a new welfare trends report. The watchdog said 3.2% of claims in 2025-2026 were fraudulent or paid in error, down from a pandemic peak of 4.3% but still far above pre-Covid levels. It estimated four-fifths of the losses were fraud. Wrongful inactivity claims in universal credit alone reached £3.9 billion in 2025, up £2.3 billion from 2019-2020. The OBR linked much of the rise to the rollout of universal credit and looser Covid-era claiming rules. The figures landed as Andy Burnham, emerging as a leading contender to replace Keir Starmer, backed efforts to cut the welfare bill by moving more claimants into work.