Fraud “epidemic” costing Britain £220 million per annum

The report shows how hidden and undetected fraud continues to significantly impact organisations across the UK, in turn highlighting the growing threat posed by increasingly sophisticated fraud techniques.

Key findings of the new report include the following: 

Fraud cost the UK’s economy an estimated £220 billion in 2024-2025 This makes fraud one of the UK’s most significant economic challenges. To put that figure into perspective, the UK’s entire health and social care budget for 2026 is £242 billion. The UK’s national deficit for 2026 (YTD August) is £51.9 billion. The figure of £220 billion per annum can be broken down into £600 million per day, £25 million an hour and £7,000 per second.

The private sector accounts for £168 billion (ie 76%) of all losses, while fraud against the public sector totals £49 billion on an annual basis Businesses bear more than three-quarters of the UK’s estimated fraud losses. 

Procurement fraud represents the largest fraud category, costing UK organisations more than £153 billion every year Stronger oversight of suppliers, contracts and purchasing processes will be critical to reducing exposure. 

Tax fraud costs the UK Government £18.2 billion annually This diverts substantial public resources away from other priorities. 

Universal Credit fraud accounts for £5.2 billion of losses each year This forms a significant part of the fraud losses borne by the public sector. 

Counterfeit goods cost UK businesses £9.8 billion annually This highlights the growing impact of counterfeit goods on private-sector losses.

Largest fraud risk

Costing UK organisations more than £153 billion each year, procurement fraud is the single largest source of fraud losses identified in the report. Despite often receiving less attention than cyber crime or consumer-focused scams, procurement fraud continues to pose a significant threat across both the public and private sectors.

As organisations face increasing financial pressures, strengthening oversight of supplier relationships, contracts and purchasing processes will be critical to reducing exposure to fraud.

Hidden fraud

While headline-grabbing fraud cases often attract public attention, a significant proportion of fraud remains undiscovered and unreported. The report suggests that hidden fraud accounts for a substantial share of total losses, with many schemes remaining undetected for years.

As a result, organisations may be significantly underestimating their exposure to fraud risks, particularly so in areas where routine controls fail to identify suspicious activity. Beyond the initial financial loss, fraud can also lead to operational disruption, reputational damage and costly investigations.

Private sector losses

The private sector accounts for an estimated £168 billion of fraud losses annually, representing more than three-quarters (76%) of all fraud identified in the report. As the largest segment of the UK’s economy, businesses face fraud risks across a wide range of activities: from procurement and payroll to counterfeit goods, refund fraud and insurance claims.

The report attributes a significant proportion of these losses to procurement and payroll fraud, duly reflecting the vast levels of spending that take place across UK businesses each year. New categories included in this year’s analysis also highlight the growing impact of counterfeit goods (estimated to cost UK businesses £9.8 billion annually) alongside losses arising from food fraud and online refund fraud.

As fraudsters continue to exploit both traditional business processes and emerging technologies, the findings suggest that organisations should treat fraud as a core business risk and ensure that adequate investment in prevention, detection and staff awareness is ongoing.

True scale of the problem

Tim Robinson, partner at Crowe focused on cyber security and counter-fraud, commented: “You cannot tackle fraud effectively without understanding its true scale. Too often, under-reporting and under-detection mean that organisations are only seeing part of the picture. The scale of the issue can be hard to grasp. Eradicating fraud entirely would be enough to plug the national deficit four times over. This shows just how impactful counter-fraud measures could be in transforming the economic picture for the UK.”

Robinson added: “At an estimated £220 billion per annum, fraud remains the UK’s most common crime and one of its most significant economic challenges. At the same time, Artificial Intelligence-generated scams, synthetic identities and deepfakes are making fraud even harder to detect and easier for criminals to carry out. Organisations need to ensure that they’re investing in the right controls, technology and staff awareness to keep pace with what’s now an increasingly sophisticated threat landscape.”

Martin Chapman, partner and head of forensic disputes and investigations at Crowe, explained: “For many organisations, the greatest fraud risk is the fraud they don’t know about. While high-profile cases often attract attention, a significant proportion of fraud remains hidden, undiscovered and unreported for years.”

Further, Chapman observed: “The immediate financial loss is often only the starting point. Fraud can trigger lengthy investigations, regulatory scrutiny, operational disruption and reputational damage, with the impact felt by employees, customers and shareholders alike.”

Chapman added: “These losses are not merely numbers on a balance sheet. They represent resources diverted away from investment, innovation and growth, while trust, once lost, can be difficult and expensive to rebuild.”

Deception and concealment

Daniel Sibthorpe, director of cyber security and counter-fraud at Crowe, informed Security Matters: “Fraud is fundamentally built on deception and concealment. Criminals go to great lengths in order to ensure their activities remain undetected, which means much of the harm they cause is never reported or fully understood. The Annual Fraud Indicator shines a light on this hidden reality, providing a clearer picture of the threat facing individuals, businesses and the public sector.”

Mike Haley, CEO of Cifas, stated: “The scale of these losses demonstrates that fraud needs to remain a national priority. Every pound lost to criminal activity is money that cannot be invested in economic growth, public services, innovation or supporting customers.”

Haley went on to state: “The latest Annual Fraud Indicator report shows that fraud is often hidden, underreported and underestimated. This makes cross-sector data and intelligence sharing and collaboration between organisations, law enforcement, regulators and Government agencies more important than ever. By working together to identify threats at the earliest opportunity, sharing insight and preventing fraud before it occurs, we can reduce the harm it causes.”

Significant challenge

Professor Mark Button, co-director of the Centre for Cyber Crime and Economic Crime at the University of Portsmouth, said: “Fraud is often discussed in terms of individual cases and incidents, but the findings in this report underpin the significant challenge facing the UK as a whole.”

Button concluded: “Fraud is not a minor problem, and neither is it victimless. It’s a form of crime that must be recognised as a major threat affecting every part of the economy and then addressed through a co-ordinated and effective nationwide response.”

*Read the Annual Fraud Indicator 2026 in full online at www.crowe.com