UK (Parliament Politics Magazine) – Chancellor Rachel Reeves plans to save £1.2bn in the Budget by cracking down on benefits fraud and overpayments across universal credit and pensions.
As reported by The Telegraph, Rachel Reeves will unveil a £1.2bn benefits fraud crackdown in the upcoming Budget.
The Chancellor will extend a taskforce targeting inaccurate universal credit claims, expected to recover £1.2bn by March 2031.
National Audit Office data reveals £6.5bn lost to universal credit fraud last year, with total benefit overpayments and fraud reaching £9.5bn in 2024.
What did the Treasury reveal about extending targeted case reviews?
A Treasury source said,
“We will never tolerate fraud, error or waste in the welfare system. Every pound of taxpayers’ money should be spent with the same care with which working people spend their own money.”
They stated,
“The Chancellor is doubling down on this next week, extending Targeted Case Reviews to save taxpayers billions and ensure help goes to those who genuinely need it.”
How is the Government cracking down on benefit fraud and overpayments?
Under the Targeted Case Review, authorities caught a couple who falsely claimed £48,500 in universal credit despite being landlords.
The two, convicted in June, claimed benefits for four years by reporting just £4,800 in capital while hiding a £170,000 second property.
Rachel Reeves faces a £342bn benefits bill, with incapacity and disability payments projected to reach £100bn annually by 2030.
The number of universal credit recipients rose to 7.5 million in January, up from 6.4 million a year earlier.
A growing number of claimants receive both incapacity and disability benefits, worth at least £10,000 a year. This often follows being moved between legacy benefits without any review.
The crackdown coincides with the government’s plans to track pensioners’ bank accounts to tackle fraud and incorrect benefit payments.
The Public Authorities (Fraud, Error and Recovery) Bill, debated for a second time in the House of Commons, will grant new enforcement powers.
Under proposed measures, recipients of universal credit, pension credit, and employment support allowance will be monitored to tackle fraud and recover around £9.6bn by 2030.
The crackdown will target universal credit and other employment benefit claimants, but also covers pensioners on pension credit. Last year, overpayments reached £610m, £270m of which was due to DWP errors.
The government will crack down on employers who fail to pay the minimum wage, with rule-breakers potentially “named and shamed” and fined, the Chancellor says.
What are Rachel Reeves’ plans for the two-child benefit cap and wealth taxes?
Prime Minister Sir Keir Starmer and Rachel Reeves will push the Budget left, scrapping the two-child benefit and introducing wealth taxes to cover spending gaps.
The proposed tax measures include a levy on bank profits, a mansion tax for properties above £2 million, and a profits tax on gambling companies.
A minister said,
“The ink definitely won’t dry on this budget until Tuesday night but it looks like the PLP [parliamentary Labour Party] is getting what it wants…wealth taxes and an end to the child benefit cap.”
Another Labour MP added,
“The message went up that it is hard enough for us to get a hearing on the doorstep as it is but if we did that [raise income tax], then the doors would have been closed on us and not reopened.”
The UK Autumn Budget 2025 will be presented on Wednesday, November 26, with expected tax policies aimed at tackling fraud and addressing the cost-of-living crisis.
