The Department for Work and Pensions (DWP) is being granted significant new authority to scrutinise the bank accounts of millions of people claiming key benefits in the UK.
What are the new DWP powers?
Under the forthcoming legislation, officials will have the power to order banks and other financial institutions to hand over information on accounts linked to three specific benefits: Universal Credit, Employment and Support Allowance (ESA), and Pension Credit.
The primary aim of these checks is to verify that individuals receiving these state payments continue to meet the strict eligibility criteria. The DWP has confirmed that it will not have direct access to browse people's full bank accounts. Instead, a previous government document clarifies the process: "DWP will require banks... to examine their own datasets and provide data to help identify where someone may not be meeting the specific eligibility criteria." This data will then be cross-referenced with existing claimant information to decide if a further, deeper investigation is warranted.
Direct deductions and debt recovery
In a separate but related measure, the department is also being given strengthened debt recovery tools. If a claimant is found to owe money to the DWP and is refusing to repay it, investigators will be able to directly deduct the owed amount from their bank account.
Before such action is taken, officials must request a minimum of three months of bank statements to confirm the individual has sufficient funds. The owed sum can then be collected either as a single lump sum or through regular instalments.
Expert warns of risks for innocent people
While the government's stated intention is to clamp down on criminal fraud, financial experts have raised concerns about the potential impact on legitimate claimants. Siobhan Blagbrough, a financial crime manager at Ocean Finance, acknowledged that the new laws show the DWP "is clearly trying to crack down on benefit fraud and stop money falling into the wrong hands."
However, she issued a stark warning: "These powers are not risk free. Innocent people could get swept up in this and suddenly find the money they rely on blocked or taken away." She highlighted that a simple administrative error or a missed notification about a slight change in earnings could trigger an investigation, leading to payments being paused and debt letters arriving unexpectedly.
Ms Blagbrough emphasised that the majority of people claiming benefits are simply trying to make ends meet and should not have to "fight to prove they are innocent when their only crime was being poor or confused by a complicated system."
To address concerns about the use of these powers, the government has stated that an independent person will be appointed to oversee the process, ensuring it is used proportionately and only when necessary. Announcing the legislation in January 2025, the then Work and Pensions Secretary, Liz Kendall, said the government was "turning off the tap to criminals who cheat the system" while implementing important safeguards.
