The Department for Work and Pensions (DWP) has confirmed that new bank account checks are being used for the first time to identify people who may be receiving incorrect benefit payments. The measures apply to people claiming Universal Credit, Pension Credit and New Style Employment and Support Allowance (ESA).
The DWP announced on Monday that it has issued its first Eligibility Verification Notice, requiring financial institutions to share certain information where bank account details suggest someone may no longer meet the eligibility rules for their benefits. The new powers are designed to identify benefit claimants who may have undeclared savings or have spent longer overseas than benefit rules allow.
What the checks involve
The UK Government estimates the measures will save taxpayers £1.2 billion by 2030/31. However, the DWP has stressed that the checks do not give the department access to people's bank transactions or spending habits, and being flagged by a bank does not automatically mean someone has committed fraud.
The measures have been introduced under the Public Authorities (Fraud, Error and Recovery) Act 2025 and will initially operate through a controlled testing phase before being rolled out more widely.
Minister for Innovation, Fraud and Debt Lilian Greenwood said: "Benefit fraudsters should be looking over their shoulder. These new powers will help us crack down on those who deliberately abuse the system, while ensuring people receive the right support at the right time.
"We are not interested in where people do their weekly shop or how much they're spending on new clothes. Banks will simply be asked to identify if somebody may no longer meet the rules for the benefits they receive, allowing us to investigate further where necessary."
With £1.2 billion in savings expected by 2030/31, this is a major step forward in tackling fraud and error, protecting public money and ensuring support goes to those who genuinely need it.
Benefits covered and information shared
The DWP has confirmed that Eligibility Verification Notices can only be issued in relation to three benefits: Universal Credit, Pension Credit and New Style Employment and Support Allowance (ESA). The checks apply across Scotland, England and Wales.
Banks and other financial institutions will be required to check accounts receiving these benefits against specific eligibility indicators supplied by the DWP. This may include accounts linked to the account receiving benefit payments, including joint accounts. The department estimates that fraud and error involving undeclared savings and time spent abroad in Universal Credit and Pension Credit cost taxpayers £1.5 billion during 2025/26.
Official guidance published on GOV.UK confirms that banks may share limited information where an account meets an eligibility indicator. This can include the names of account holders, account numbers and details of linked or joint accounts. However, banks cannot share full statements, individual transactions, information about spending habits or specific transaction locations through these checks.
What happens if an account is flagged
The DWP has stressed that a bank account being flagged does not automatically mean someone has committed fraud or is receiving an incorrect benefit payment. Department staff must carry out further checks before making any decision about a claimant's entitlement.
If additional information is required, claimants may be contacted through their Universal Credit online journal, by telephone, letter or text message. People are advised to respond as soon as possible to requests for information to avoid benefit payments being delayed or stopped. Anyone who disagrees with a subsequent decision about their benefit entitlement can request a mandatory reconsideration.
The DWP said the new measures will be subject to independent oversight, with the initial testing phase designed to ensure the checks operate effectively before wider implementation. The announcement comes ahead of Wednesday's Budget, when further anti-fraud measures are expected to be announced, including additional Jobcentre specialists and tougher checks on Universal Credit claims involving people living abroad.
