DWP now checking bank accounts for Universal Credit and Pension Credit

The new rules form part of the Public Authorities (Fraud, Error and Recovery) Bill, which ministers say will help identify benefit fraud and prevent people from building up large overpayments they later have to repay.

However, despite widespread concern over the changes, the Government insists the new powers are far more limited than many people realise.

The DWP says it cannot access bank statements, view individual transactions or see what claimants spend their money on under the new Eligibility Verification Measure.

Instead, banks and building societies will be required to carry out checks against eligibility criteria set by the DWP and only share limited information where an account appears to match those indicators.

The three DWP benefits affected first

The DWP says: “The measure will initially focus on benefits where incorrect payments are currently highest, these are:

“Other benefits could be added with the approval of Parliament in the future through affirmative regulations.”

The DWP says these benefits were chosen because they currently account for the highest levels of incorrect payments.

Importantly, State Pension is specifically excluded from the new powers and ministers have confirmed it cannot be added later using secondary legislation.

Can the DWP see my bank account?

According to the Government, the new powers do not give DWP direct access to anyone’s bank account.

Instead, banks and other financial institutions will examine their own records and compare them against eligibility indicators supplied by the department.

The GOV.UK guidance states: “The powers will not give DWP access to any claimants’ bank accounts, nor any information on how claimants spend their money.”

It also says: “DWP will not share any personal information with banks or other financial institutions and a member of DWP staff will always be involved in any further investigations and decisions made on entitlement, as they are now.”

What information can banks share?

If an account meets one of the DWP’s eligibility indicators, banks can only provide limited information.

This can include:

• account number and sort code
• account holder’s name
• date of birth
• confirmation that the account appears to meet one of the DWP’s eligibility indicators

Banks cannot send spending history or transaction information under these powers and could face penalties if they share information beyond what the legislation allows.

What happens if you’re flagged?

Being flagged does not automatically mean you’ve done anything wrong.

The DWP says every case requiring further enquiries will still be handled by trained staff.

The department has also confirmed that artificial intelligence will not make decisions about benefit entitlement or payments.

Any decision to investigate, suspend or change a claim will continue to be made by a human decision-maker.

The Government says there are safeguards

The DWP says the bank account checks will be introduced gradually using a “test and learn” approach from 2026 before wider rollout.

The Government has also promised independent oversight of the new powers.

According to the legislation, an independent reviewer will monitor whether the Eligibility Verification Measure is being used lawfully and effectively, with reports published and laid before Parliament.

The Bill also requires new Codes of Practice governing how the powers are used, alongside new rights of review and appeal for financial institutions receiving Eligibility Verification Notices.

Why Universal Credit savings are likely to be checked

One example given by the DWP is Universal Credit’s capital rules.

Most people cannot receive Universal Credit if they have more than £16,000 in savings, unless a specific exemption applies.

The department says eligibility indicators may be designed to identify accounts that appear inconsistent with benefit rules, allowing staff to investigate further where necessary.

The DWP estimates that, once fully operational, the new system could help identify between 50,000 and 100,000 incorrect benefit payments every year, while ensuring human investigators remain responsible for every final decision.

Initially, the checks will apply to claimants receiving three specific DWP benefits or pension payments.

The DWP states that the powers are limited in scope and can only be used to obtain information about bank accounts receiving a specified DWP benefit, as well as any linked accounts that meet the department’s eligibility indicators.

Can the DWP see my bank statements?

According to guidance published by the DWP, the department has the power to require banks and other financial institutions to provide information to help verify whether claimants are entitled to benefits and to identify incorrect payments.

Under the new rules, banks and financial institutions must review accounts that receive specified DWP benefit payments and compare them against eligibility indicators set by the department.

These indicators, which are outlined in an Eligibility Verification Notice, are designed to flag accounts where the criteria suggest a payment may need further investigation.

Can the DWP look at my bank transactions and see what I buy?

No, the rules are clear on this. Banks can only share limited information in response to an Eligibility Verification Notice, for example:

• specified details about the account(s) (such as sort code and account number)
• specified details about the account holder(s) (such as their name(s) and date(s) of birth)
• specified details about how the account(s) meets the eligibility indicators.They could receive a penalty for oversharing information, such as transaction information. The DWP also adds: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”

It gives the example of, for Universal Credit, an individual cannot hold more than £16,000 in savings and remain eligible for Universal Credit, “unless this capital is a result of a specified exception.”

There’s a full list of those exceptions here.

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What happens if the DWP decides I have too much money in my account?

Where further enquiries or investigations are required, they will continue to be led by the Department for Work and Pensions (DWP).

Ministers have emphasised that artificial intelligence will not be used to make decisions about benefit entitlement or payments. Instead, any action taken following an investigation will continue to involve human decision-makers.

The eligibility verification measure will be introduced gradually through a “test and learn” approach, giving the department time to refine processes and establish best practice before wider implementation.

Once fully rolled out, the DWP estimates the measure will help identify between 50,000 and 100,000 cases of benefit overpayment each year.