New DWP figures show benefit fraudsters are costing British taxpayers £4.3 million a week by falsely claiming to live in the UK while actually residing overseas, with £226 million lost to abroad-based fraud in the year to March.
Benefit fraudsters are costing taxpayers £4.3 million a week by continuing to claim fully funded British benefits while living abroad, according to new analysis. Figures from the Department for Work and Pensions show that £226 million was lost to fraud involving claimants living overseas in the year to March, with many falsely maintaining they still reside in Britain while in fact enjoying life in sun-soaked destinations abroad. Former Conservative leader Sir Iain Duncan Smith has called on new Prime Minister Andy Burnham to take stronger action to tackle the problem.
Breakdown of the fraud
Of the total £226 million lost, £103 million came from fraudulent Universal Credit claims, while £67 million was linked to claimants wrongly receiving Pension Credit while living overseas. A further £29 million was lost through fraudulent Housing Benefit claims, and £27 million was wrongly paid out through Personal Independence Payments (PIP).
According to the DWP’s latest annual estimates, this £226 million represents around 2.3% of the department’s total estimated £9.9 billion lost to benefit fraud and error across the 2025/26 financial year. The DWP has said overall fraud and error has fallen by around 25% since peaking in 2022, though fraud linked to claimants living abroad remains a significant area of concern.
The rules on claiming benefits while abroad
Benefit claimants are legally required to notify the DWP if they intend to leave the UK for an extended period. Under current rules, those receiving benefits such as PIP can typically remain on full payments for up to 13 weeks while out of the country; beyond that, claimants are obliged to inform the DWP, and payments are paused until their return.
Universal Credit claimants face stricter conditions, generally losing entitlement to continued payments if they leave Great Britain for more than one month, except in limited circumstances. Separately, around 2,000 people are legally claiming PIP while living abroad full-time, under treaty arrangements with European Economic Area nations that permit this in specific cases.
Government response
A DWP spokesman said: “We’re determined to crack down on fraud. Our latest figures show us fraud and error has fallen by a quarter since its 2022 peak. We will leave no stone unturned.” The department has introduced new fraud detection powers allowing it to require banks and other organisations to provide limited information that can help identify fraudulent claims, including cases where claimants may be living overseas. Airlines and other third parties may also be required to share limited travel-related information with the DWP where relevant to investigations into suspected fraud involving extended absences from the UK. The department says it is increasingly relying on enhanced data-matching and intelligence-led investigations to identify people falsely claiming to live in Britain while actually residing abroad.
Calls for tougher action
Sir Iain Duncan Smith said more could be done to tackle the problem, particularly around how claims are monitored. “This could be cut down if the DWP brought back face-to-face meetings,” he said. “People on benefits like Universal Credit should be looking for work.”
