The UK government is rolling out new laws that allow the Department for Work and Pensions (DWP) to request financial information directly from banks to help verify benefit claims. This marks a significant shift in how the welfare system will operate, aiming to tackle fraud and reduce errors in the payment of benefits.
What Are the New DWP Bank Check Powers?
Under the Public Authorities (Fraud, Error and Recovery) Act 2025, the DWP will now have the ability to request financial data from banks to verify if someone is eligible for benefits such as Universal Credit. These checks aim to make sure that individuals are not receiving more benefits than they are entitled to.
The new system will involve the DWP issuing Eligibility Verification Notices (EVNs) to banks and other financial institutions. These notices will require banks to examine their records and provide information that helps the DWP determine whether someone meets the financial criteria for benefits.
However, DWP officials will not have direct access to people’s bank accounts. Instead, banks will conduct the checks themselves and only return relevant information when needed.
What Information Can Be Shared?
The powers are specifically designed for eligibility checks, meaning the DWP will not be monitoring how people spend their money. Banks will only be asked to provide limited financial data, such as whether an individual’s savings exceed the thresholds allowed for certain benefits, rather than full transaction histories.
For example, if someone has more than the allowable savings limit, the bank might notify the DWP, but they will not provide details about specific purchases or account activities, explains Dailyrecord. The aim is to focus on ensuring benefits are paid correctly, rather than conducting a complete financial audit.
Safeguards and Oversight of the New Powers
The new powers will not be handed out without significant safeguards. Only authorized DWP staff will be able to request and use this information, and their actions will be governed by a formal Code of Practice. Additionally, the use of these powers will be subject to parliamentary scrutiny to ensure they are being used fairly and appropriately.
To minimize the risk of misuse, the system will be gradually rolled out. Initially, the DWP will work with a small number of financial institutions, testing the system before expanding it more broadly.
Why Are the New Powers Being Introduced?
The new powers are part of a broader effort to combat fraud and incorrect benefit payments across the welfare system. The DWP’s fraud and error figures show that £8.4 billion was lost in overpayments in the 2024/25 fiscal year, which amounts to 2.9% of total benefit spending. Universal Credit alone accounted for a significant portion of these overpayments.
Ministers argue that these new powers will make it easier to detect overpayments and fraud in a more efficient and accurate way. The government hopes that by improving the accuracy of benefit payments, taxpayers’ money will be better protected.
What Does This Mean for Claimants?
For most benefit claimants, there will be little change in how they interact with the system. However, in some cases, the DWP will be able to directly verify financial information with banks, rather than relying on claimants to provide documents like bank statements themselves.
While the DWP insists the new system will not lead to widespread monitoring of individual spending, critics warn that it could result in financial surveillance by the back door. Claimants may worry that their financial privacy is being compromised, even if the data shared is limited to eligibility checks only.
