Investigators can also directly take funds from people’s bank accounts under the new powers
New powers are coming into force with the DWP to check the bank account details of millions of benefit claimants. Under new eligibility checks, banks will be mandated to hand over certain data about accounts linked to specific benefits, including Universal Credit.
The fresh powers are part of a new suite of powers to clamp down and fraud and error in the benefits system, with new laws added to the books in December 2025. Included in the legislation is a new eligibility verification measure, where officials will contact banking providers to make them search through the accounts they provide that are linked to certain benefits.
The providers will have to flag up any accounts which may not be eligible to receive their payments and pass on the details to the DWP for further investigation. For example, if you have £16,000 or more in savings or investments, you cannot receive Universal Credit.
For Pension Credit, for each £500 you have in savings above £10,000, this counts as £1 a week of income. So this effectively reduces your income top-up element of Pension Credit by £1. The DWP has clarified previously that it will not have direct access to people’s bank accounts under the new powers.
These eligibility checks will first be used to check the details of those claiming Universal Credit, Employment and Support Allowance and Pension Credit. But the legislation states that this could be expanded to other benefits.
The powers will start to be used once a consultation period and some codes of practice for the new measures are approved by Parliament. There will also be a ‘test and learn’ phase for the deployment of the powers, to ensure they are used properly.
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‘False positives’
Stuart Morris, chief technology officer at compliance technology provider SmartSearch, said this trial phase should focus on “accuracy, proportionality, and public trust”. He said: “The DWP needs to test how effectively eligibility verification systems identify genuine fraud without creating unnecessary false positives.
“This includes validating data against multiple authoritative sources, ensuring digital identity checks are reliable, and confirming that automated processes can distinguish between suspicious activity and legitimate changes in circumstances.”
He said the department’s systems need to be able to pick up document fraud that manual processes wouldn’t usually catch, such as AI-generated bank statements, synthetic identities, or deepfake verification documents. The expert called for proper safeguards around accessing people’s data and making decisions about individual cases.
Mr Morris said: “People need reassurance that their information is only being used for its intended purpose, retained for the minimum time necessary, and subject to independent oversight. Trust will be critical to the long-term success of these powers.”
A DWP spokesperson said previously: “We have an obligation to protect public funds, with this legislation set to save the taxpayer £2.1billion over the next five years, part of wider plans that will save £14.6billion. The legislation includes an eligibility verification measure which will require banks to share limited data on claimants who may wrongly be receiving benefits. It does not involve access to benefit claimants’ bank accounts.”
Directly taking funds from bank accounts
The new legislation also includes powers allowing DWP officials to directly take an amount from a person’s bank account. This measure will be used when a person owes the department funds and is adamantly refusing to settle the amount.
These new direct deduction powers are intended to help recover funds from people who have left the benefits system. The DWP could previously only recoup debts through benefit deductions or from a claimant’s PAYE earnings.
In cases where investigators want to use these powers, they will contact the person to give them a chance to dispute the issue. They will also request at least three months of bank statements for the account, to make sure they have the fund available.
The new laws also expand the powers of benefit fraud investigators to contact people to demand information. Previously, they could only request details from people on a restricted list, but now they can contact any third party connected to a suspect, to hand over the details they need.
