DWP bank checks benefit eligibility in £1.2 bn fraud crackdown

The UK’s Department for Work and Pensions (DWP) has begun using new powers requiring banks and financial institutions to check whether benefit claimants meet eligibility requirements, as part of a fraud prevention programme expected to save taxpayers £1.2 bn by 2030/31.

The department issued its first Eligibility Verification Notice on October 26, 2026, activating measures introduced under the Public Authorities (Fraud, Error and Recovery) Act 2025. Banks will be required to identify accounts where financial information suggests that a claimant may no longer qualify for certain benefits or may be receiving incorrect payments.

• The Department for Work and Pensions has launched bank account eligibility checks to identify undeclared savings and overseas stays that may breach benefit rules, targeting £1.2 bn in savings by 2030/31.
• Banks can share limited account and eligibility information for Universal Credit, Pension Credit and Employment and Support Allowance, but DWP cannot access everyday transactions or automatically stop benefits based on a bank flag.
• The 2026 Budget includes more than 2,000 additional fraud specialists and tighter Universal Credit controls, with the government forecasting over £20 bn in total fraud and error savings.

The Eligibility Verification Measure (EVM) focuses initially on two significant sources of fraud and error: undeclared savings and claimants remaining overseas longer than benefit regulations permit.

According to government estimates, these two issues cost taxpayers £1.5 bn during 2025-2026 in relation to Universal Credit and Pension Credit alone. The overall estimated fraud and error rate in the benefits system stood at 3.2% in 2025-2026, following the increase recorded in 2020-2021.

The new checks apply to three benefits: Universal Credit, Pension Credit and Employment and Support Allowance (ESA). Banks will examine relevant accounts against specified eligibility indicators and report cases that require further investigation.

The measure is being introduced through a controlled testing phase, with independent oversight before any wider implementation.

How DWP bank checks will verify benefit eligibility

Under the new framework, DWP can issue an Eligibility Verification Notice requiring financial institutions to check accounts receiving specified benefits against defined eligibility conditions.

Banks will be asked to identify accounts where the available information suggests that a claimant’s savings may exceed permitted thresholds or that their use of an account overseas may indicate an extended absence from the UK.

The checks also cover qualifying linked accounts, including relevant joint accounts, where the information meets the conditions specified in a notice.

Where an account matches an eligibility indicator, financial institutions can be required to provide limited identifying and financial information, including:

• Names and identifying details of account holders, together with relevant account numbers and sort codes.
• Information about linked accounts and capital held in relevant accounts.
• Details showing how an account meets the specified eligibility indicators.
• Dates indicating the use of an account outside the UK, where relevant to benefit entitlement.

The information is intended to help officials determine whether further enquiries are necessary, rather than establish that a claimant has committed fraud.

DWP does not receive unrestricted access to bank accounts, online banking services or transaction histories. Financial institutions are prohibited from providing information about individual purchases, transaction amounts or payment recipients under the EVM.

The statutory Code of Practice also restricts the age and scope of information that may be requested. Notices generally cannot seek information more than one year old, although exceptions apply to the date an account began meeting an eligibility indicator.

These restrictions are intended to limit the information collected to what is necessary to assess potential incorrect benefit payments.

Will DWP bank checks automatically stop benefit payments?

A bank account being flagged under the Eligibility Verification Measure does not establish fraud, wrongdoing or an automatic loss of benefit entitlement.

DWP must conduct further checks before determining whether a claimant has received incorrect payments. Decisions about eligibility cannot be made solely on information obtained through an Eligibility Verification Notice.

The department says the system is intended to identify problems earlier, including cases where claimants have failed to report changes in savings or periods spent abroad.

Earlier detection could also reduce the accumulation of overpayments that claimants may subsequently be required to repay.

Lilian Greenwood, Minister for Innovation, Fraud and Debt, said the new powers would help identify deliberate abuse of the benefits system while maintaining support for eligible recipients.

We are not interested in where people do their weekly shop or how much they’re spending on new clothes.

Lilian Greenwood, Minister for Innovation, Fraud and Debt

She explained that banks would identify potential breaches of benefit rules, allowing DWP to decide whether an investigation was warranted.

The department has emphasised that the checks do not amount to continuous monitoring of personal spending or unrestricted access to financial accounts.

The statutory Code of Practice, developed following public consultation, establishes safeguards governing the collection, use and handling of information. The system will also remain subject to independent oversight during its initial implementation.

DWP fraud crackdown targets £1.2 bn in savings by 2030/31

The Eligibility Verification Measure forms part of a larger government programme to reduce fraud, administrative error and outstanding benefit debt.

When the new bank verification powers were activated on October 26, DWP said the broader programme was expected to save £14.6 bn over five years.

The Public Authorities (Fraud, Error and Recovery) Act 2025 also introduced stronger debt recovery powers and additional information-gathering measures intended to support fraud prevention and investigations.

The government expects earlier identification of incorrect claims to reduce unnecessary expenditure while limiting the financial consequences for legitimate claimants who receive excessive payments in error.

The department’s approach combines verification of financial information with checks on personal circumstances that affect benefit entitlement.

Claimants are expected to report relevant changes promptly, including changes in capital holdings, household circumstances and time spent outside the country.

The reforms also sit alongside the government’s wider welfare programme, including changes to Universal Credit and increased employment support for disabled people and individuals with long-term health conditions.

The government has allocated £2.5 bn to its youth employment package and has linked its welfare reforms to the recommendations of the Milburn and Timms reviews.

Budget 2026 adds 2,000 DWP fraud specialists and tighter Universal Credit checks

The government’s October 28 Budget expanded its welfare fraud prevention programme, with additional measures expected to generate £1.4 bn in savings over the forecast period.

Chancellor John Healey said the new measures would bring total government savings from welfare fraud and error to more than £20 bn over the forecast.

The UK Budget includes funding to recruit more than 2,000 specialist DWP staff to prevent fraud involving new and existing Universal Credit claims.

According to the accompanying Budget costings, the recruitment measure is scheduled to take effect from April 2027 and is expected to generate £175 mn in savings by 2031-2032.

The additional specialists will support more extensive verification of claims, alongside measures designed to identify claimants who continue receiving payments after remaining abroad longer than benefit regulations allow.

Further changes include preventative checks requiring Pension Credit claimants to redeclare the correct amount of capital they hold.

The Budget also restricts access to repeat Universal Credit New Claimants advances where debt from a previous New Claims Advance remains outstanding, with exemptions intended to protect claimants in exceptional circumstances.

These measures add to the existing bank verification programme by increasing scrutiny of information provided during benefit applications and subsequent changes in circumstances.

The government expects the additional checks to reduce fraudulent claims and administrative errors before incorrect payments accumulate.

During his Budget speech, Healey also announced £100 mn for a local apprenticeship service intended to connect young people with employers.

The government plans to finance that initiative using savings generated through its welfare fraud and error programme.

DWP expands Universal Credit verification workforce

Alongside the recruitment of new fraud specialists, DWP is restructuring part of its existing Universal Credit verification workforce.

Earlier in October, the department announced plans to bring approximately 2,700 outsourced employees involved in Universal Credit checking operations into its direct workforce.

The transfer could make DWP the largest central government department by headcount again.

According to civil service workforce statistics for March 2026, DWP employed 96,925 people, approximately 640 fewer than the Ministry of Justice.

Bringing outsourced verification staff into the department would expand its direct operational capacity as the government increases scrutiny of benefit claims.

The recruitment and workforce changes accompany the introduction of new data-sharing powers, creating additional capacity for identifying and investigating suspected fraud and incorrect benefit payments.

Benefit fraud cases and enforcement measures

The government has pointed to several recent benefit fraud prosecutions as examples of deliberate misrepresentation of personal circumstances.

• Colin Hegarty fraudulently claimed more than £70,000 after presenting himself as single. His relationship was exposed after a Facebook photograph showed him proposing to his partner.
• Bethany Elwood was sentenced following a £78,000 Universal Credit fraud case involving false claims that she was single, despite living with her boyfriend for more than four years.
• Catherine Wieland was sentenced in connection with £23,000 in fraudulent Personal Independence Payment (PIP) claims, with evidence including footage of her ziplining in Mexico.

These cases illustrate the different forms of benefit fraud targeted by enforcement authorities. PIP, however, is not among the three benefits currently covered by the new Eligibility Verification Measure.

DWP’s bank verification powers are specifically limited to Universal Credit, Pension Credit and Employment and Support Allowance. Any extension to additional benefits would require further legislative approval.

The measures are intended to identify potential eligibility discrepancies rather than replace the existing investigative process.

Banks will provide information only where accounts meet specified conditions, and DWP must undertake further assessment before making decisions affecting individual claimants.

The £1.2 bn savings forecast for the Eligibility Verification Measure remains a projection through 2030/31. Its financial impact will depend on the results of the initial testing phase, subsequent implementation and the number of incorrect payments identified and prevented.