Francesca Smith, Senior Research Officer, Money and Mental Health; Toby Murray, former Senior Research Officer, Money and Mental Health

17 July 2025

This report examines how central government departments collect debt. 

In particular it focuses on how the Department of Work and Pensions (DWP) recoups benefits overpayments – showing its approach to be more sudden and harsh than that of consumer creditors.

The research shows that 1.1 million people across the UK owe the DWP money that they have been overpaid in benefits, either due to DWP error or to changes in a person’s circumstances. 

The DWP can forcibly take money from your income – something commercial lenders cannot do – through a deduction in monthly Universal Credit payments and with little warning. This results in serious financial and psychological harm for many people already struggling with mental health problems. 

The DWP should:

• Proactively assess how much people can afford to repay, instead of automatically taking 15% of their Universal Credit payments. This could mirror the approach taken by consumer creditors.

Government Debt Management Function should:

• Strengthen and enforce its guidance for all government departments. This should include guidance on how to protect people in vulnerable circumstances from harm, including people with mental health problems.

Read the full policy note here.

This research was funded by abrdn Financial Fairness Trust.