Need to know
The Department for Work and Pensions (DWP) has been granted new bank account checking powers, as part of wider crackdown on benefit fraud
What you need to know about if DWP really see your bank account and spending
- The Department for Work and Pensions (DWP) has been granted new bank account checking powers, as part of wider crackdown on benefit fraud.
- The Public Authorities (Fraud, Error and Recovery) Act 2025 gives the DWP new legal powers to force financial institutions to check your bank account details to verify your eligibility and entitlement to benefits.
- For example, this can include how much money you have in savings, or if you are spending a lot of time abroad. If you are claiming Universal Credit, you normally cannot have more than £16,000 in savings, or if you are in receipt of Pension Credit, you cannot be abroad for more than four weeks.
- The DWP says it will work with the 15 biggest banks in the UK, which include Barclays, HSBC, Halifax, NatWest, Santander and others.
- But crucially, the DWP will not be able to log into your bank account, nor will the DWP have direct, real-time access to see your daily transactions or spending.
- If the bank identifies a potential issue, it will flag this to the DWP, who will then conduct a more thorough investigation. The DWP has stressed that benefit decisions will not be made on bank account data alone.
- In some cases, the DWP will also be able to recover money owed by benefit claimants directly from their bank account without a court order.
- There are three benefits covered under the new powers: Universal Credit, Pension Credit and Employment and Support Allowance (ESA). The state pension is not included in the list of benefits covered by the new powers.
- The new rules have become law, but will not be implemented until an official Code of Practice has been developed. A public consultation opened in December and will run until February 27, 2026.
- The DWP estimates its new powers will save taxpayers an estimated £1.5billion over the next five years by helping reduce benefit fraud.
- A DWP spokesperson said: “We have introduced major reforms to ensure people are paid the correct benefits, to recover overpayments and to help save billions of pounds for the taxpayer.
- “The powers in the Fraud, Error and Recovery Act have numerous safeguards and will be independently overseen. We will not have access to claimants’ bank accounts when checking they are receiving the correct benefits.
- “We are forecasting an ambitious reduction in fraud and error levels to 2.8% by 2028-29, the lowest level since tax credits were introduced in 2003-04.”
- Read the full story: Can DWP really snoop on my bank account and see all my payments?
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