Fraud costs the UK economy £193 billion a year

Fraud in the UK: Updated Insights and Staggering Costs in 2025

Fraud continues to pose a massive challenge in the UK, costing the economy an estimated £193 billion annually, according to the Annual Fraud Indicator. This figure far exceeds previous government estimates of £50 billion in 2013, highlighting the urgent need for robust anti-fraud measures across all sectors.

Key Findings from the Annual Fraud Indicator

£193 billion annually: Equivalent to over £6,000 lost per second, impacting every individual and organization in the UK.
£144 billion lost by the private sector: SMEs and large enterprises face the brunt of fraud attacks.
Procurement fraud dominates: A staggering £127 billion lost annually through false invoices and bribery in contract awards.

Top Types of Fraud Impacting UK Businesses

Procurement Fraud
- The largest source of fraud, costing £127 billion annually.
- Includes false invoicing and bribery in awarding contracts.
Payroll Fraud
- Accounts for £12 billion annually, representing 8% of total private sector fraud losses.
Insurance Fraud
- Costs £1.3 billion annually, with 350 fraudulent claims made daily.
Mortgage Lending Fraud
- Losses of £1.3 billion annually, with 84 out of every 10,000 applications flagged as suspicious.
Charity Sector Fraud
- The third sector suffers losses of £2 billion annually, impacting donations and operations.

Public Sector Fraud Costs

The public sector loses £37.8 billion annually, equivalent to 5.5% of its £694 billion budget. Key areas include:

Tax Fraud:
- Costs £15.4 billion annually, representing 3% of total tax revenue.
Procurement Fraud:
- Public sector procurement fraud costs £10.5 billion annually, shared between central and local government.
NHS Fraud:
- Estimated losses of £2.5 billion annually related to income and expenditures.
Housing Tenancy Fraud:
- Costs £1.7 billion annually.
Benefit and Tax Credit Fraud:
- Estimated at £2.4 billion annually.
Grant Fraud:
- Results in £2.7 billion in losses annually.

Impact on Individuals and Businesses

Nick Mothershaw, director of fraud and identity solutions at Experian, emphasizes the pervasive impact of fraud:

“Fraud costs the UK economy £193 billion annually and affects every individual. Even though 95% of fraud is not a direct cost to end consumers, these losses translate into higher prices for goods and services.”

Whether you’re buying a washing machine or opening a savings account, fraud drives up costs and undermines trust.