Taxpayers are forking out £25m each week on benefits cheats who hide their savings

Data shows fraudsters hiding their assets are costing taxpayers more than £25 million a week.

Official figures show that applicants who had savings and investments which meant they were not eligible for benefits claimed £1.3bn in the last financial year.

The amount fraudulently claimed has increased by more than a third since it was estimated at £982 million in 2021-22.

Conservative Party work and pensions spokeswoman Helen Whately said the system was being ‘gamed’ with tricks.

‘Billions of pounds of taxpayers’ money are lost to fraud every year. “People are abusing and tampering with our welfare state and this is eroding public confidence in it,” he said.

‘After two years in office, Labor is failing on welfare reform, failing on welfare savings and so far failing to stop benefit fraud.’

Lee Anderson, chief executive of Reform UK, said Labor had failed to get the welfare issue under control and allowed benefit fraudsters to laugh “all the way to the bank”.

Figures from the Department for Work and Pensions (DWP) show hundreds of claimants are hiding their cash savings and assets.

Catherine Wieland, 33, claimed £23,000, saying anxiety had left her confined to her home. He was later photographed clubbing, surfing and ziplining in Mexico

Universal Credit benefits are capped at those with savings between £6,000 and £16,000; between these amounts, payments are reduced by £4.25 for every £250 saved.

Anyone with savings of more than £16,000 is not eligible for Universal Credit.

The bulk of the £1.3bn bill for 2025/26 was made up of Universal Credit claims, but fake housing benefit claims and pension credit fraud also hit taxpayers hard.

This figure has increased by £68 million in just one year, with benefit scams taking in £1.25 billion in 2024-25.

Bogus welfare claims cost taxpayers more than £1 billion in each of the last three financial years, and last year such claims accounted for almost a fifth of the £6.5 billion taxpayers lost to fraud, according to reports.

This comes at a time when the aid bill is predicted to rise to £333bn this year; This means an annual increase of approximately £18 billion.

Last year, Prime Minister Sir Keir Starmer’s attempts to tackle the cost by limiting the criteria for people claiming personal independence payment (PIP) were blocked by his backbenchers.

His likely successor, Andy Burnham, has said he will not make ‘drastic cuts’ to benefits but will instead create jobs for people.

Last week, he hinted that taxes would have to rise to pay for his proposed spending plans. He also said he would stand by Labour’s manifesto commitment not to raise income tax, but said ‘there is some room for movement in that manifesto on tax’.

Asked how he would deal with welfare spending, Mr Burnham said: ‘I will not make drastic cuts to benefit levels, which would push people into even worse poverty; This often creates a backlash, and understandably so.’

Instead, he said he would focus on reforming education, offering job placements to young people and building council houses to reduce the number of ‘Neets’ (young people not in education, employment or training).

To calculate the estimated fraud figures, the DWP examined a statistically representative sample of all claims made during the year.

A DWP spokesman said: ‘The government inherited a broken system, but we now have stronger powers to go directly to banks and check what fraudsters are really doing as part of a commitment to save £14.6bn over the next five years.

‘If you’re hiding your savings to claim benefits you don’t deserve, our message is simple: we will find out, stop payments and get the money back.

‘We are committed to tackling all forms of fraud and error and have already investigated over a million Universal Credit claims and stopped £1bn of incorrect payments through our targeted case investigation.’