The Department for Work and Pensions (DWP) is set to introduce new powers requiring banks to check the accounts of millions of benefit claimants, including those on Universal Credit, Pension Credit, and Employment and Support Allowance. Under the eligibility verification measure, banks must flag accounts that may not be eligible for payments, such as those with savings over £16,000 for Universal Credit.
The powers, part of legislation passed in December 2025, aim to clamp down on fraud and error, saving the taxpayer an estimated £2.1 billion over five years. However, experts warn of potential 'false positives' where legitimate claimants could be wrongly flagged. Stuart Morris of SmartSearch stressed the need for accuracy, proportionality, and public trust during the trial phase.
The DWP clarified it will not have direct access to bank accounts. Instead, banks will search their records and report suspicious accounts. The legislation also allows DWP officials to directly deduct money from accounts of those who refuse to repay debts, after giving them a chance to dispute the issue and providing three months of bank statements.
Additionally, fraud investigators can now demand information from any third party linked to a suspect, expanding their previous powers. The measures will be rolled out after a consultation and code of practice approval, with a 'test and learn' phase to ensure proper use.
