The Department for Work and Pensions (DWP) is set to introduce new powers requiring banks to check the accounts of benefit claimants, with millions warned to update their bank details or risk losing payments. The measures, part of legislation passed in December 2025, aim to clamp down on fraud and error in the benefits system.
Under the new eligibility verification powers, banks will be mandated to search accounts linked to specific benefits, including Universal Credit, and flag any that may not be eligible. For example, claimants with savings over £16,000 cannot receive Universal Credit, while for Pension Credit, each £500 above £10,000 reduces income top-up by £1 per week. The DWP has clarified it will not have direct access to people's accounts.
The checks will initially apply to Universal Credit, Employment and Support Allowance, and Pension Credit, but could be expanded. A consultation and 'test and learn' phase will precede full implementation. Stuart Morris of SmartSearch emphasised the need for accuracy to avoid false positives, stating systems must distinguish genuine fraud from legitimate changes.
Additional powers allow the DWP to directly deduct owed funds from bank accounts, targeting those who refuse to repay debts after leaving the benefits system. Investigators can also request three months of bank statements before using this power. Furthermore, fraud investigators can now demand information from any third party connected to a suspect, expanding previous restrictions.
A DWP spokesperson said the legislation will save taxpayers £2.1 billion over five years, part of wider plans saving £14.6 billion. Claimants are urged to ensure their bank details are up to date to avoid payment disruptions.
