The Department for Work and Pensions (DWP) has activated sweeping new powers, dubbed the 'bank spying bill', allowing it to scrutinise the finances of benefit claimants in a major crackdown on fraud.
What the New Powers Allow
Under the Public Authorities (Fraud, Error and Debt) Bill, which came into force on Wednesday 3 December 2025, DWP agents can now formally request specific financial information from banks and building societies about individuals claiming benefits. Financial institutions face penalties if they fail to comply with these requests.
The data that can be accessed includes account holder names, sort codes, and account numbers. The government has stated that the powers do not extend to viewing individual transaction histories or spending patterns. The primary aim is to verify a claimant's eligibility for benefits by checking account balances and identifying undisclosed capital.
Direct Deductions and Financial Impact
In a more contentious move, the DWP has also been granted authority to use 'Direct Deduction Orders'. This power enables the department to recover overpaid benefits by taking money directly from a person's earnings or their bank account without needing to go through the courts first.
The Treasury estimates these aggressive new measures will save the taxpayer approximately £1.5 billion by the 2029/30 financial year. Ministers argue this is a necessary step to protect public funds and ensure the welfare system supports only those who are legally entitled to it.
Backlash from Civil Liberties Campaigners
The implementation has sparked immediate criticism from privacy and civil rights organisations. Groups have condemned the powers as "excessively intrusive" and a dangerous shift towards "mass financial surveillance" of citizens by the state.
Critics warn that granting a government department the ability to access personal financial data and directly withdraw money sets a concerning precedent. They argue it undermines privacy safeguards and could disproportionately impact vulnerable individuals, even if the intent is to target fraudsters.
The announcement follows recent comments by Prime Minister Keir Starmer, who pledged to reform a welfare state he said was "trapping people in poverty". These new DWP powers represent a significant and controversial step in that wider reform agenda.
