Millions of people claiming benefits could soon see their bank accounts checked in a new way, as the Department for Work and Pensions (DWP) rolls out expanded powers aimed at tackling fraud and errors.
Under the new rules, published last summer, the DWP will be able to issue “Eligibility Verification Notices” to banks, asking them to check whether certain benefit claimants still meet the rules for the support they receive.
The Government says the change is about accuracy, not surveillance — but for claimants, the detail matters.
Why is the DWP doing this?
The documents say the move is to stop a long-running problem: benefits paid incorrectly because information hasn’t been updated or verified.
The DWP already checks employment and income details using HMRC data. But for other rules - such as how much savings someone has or how long they’ve spent abroad - the system often relies on claimants self-reporting.
“When this does not happen, this can result in overpayments, debts building up for claimants and losses to the taxpayer,” the department says.
The National Audit Office has backed greater use of data to reduce fraud and error, and the DWP believes earlier checks could stop debts spiralling before people even realise there’s a problem.
So what exactly are Eligibility Verification Notices?
An Eligibility Verification Notice is a formal request sent by the DWP to a bank or financial institution.
Rather than handing over full account details, banks will be asked to check their own data against specific eligibility indicators set by the DWP - and only flag accounts that appear to breach the rules.
“The power can only be used to obtain information on accounts that receive a specified DWP benefit,” the department confirms.
In other words, this is not a trawl of everyone’s finances, instead it’s targeted at accounts that already receive certain benefits.
Which bank accounts can be checked?
Only accounts that receive one of the specified benefits can be examined, along with what they call 'any linked accounts' that meet the eligibility indicators.
Initially, this applies to:
- Universal Credit
- Pension Credit
- Employment and Support Allowance (ESA)
Crucially, the State Pension is excluded and cannot be added later under these powers.
For example, Universal Credit claimants generally cannot have more than £16,000 in savings and remain eligible (with limited exceptions). Banks may be asked to identify accounts where this threshold appears to be exceeded.
“No decisions about benefit entitlement will be made on this information alone,” the DWP stresses.
Discussing the Public Authorities (Fraud, Error and Recovery) Bill - in rooting out benefit fraud (AND OVERPAYMENT ERROR), 'eligibility verification notices' amount to what @BigBrotherWatch call bank spying powers. I argued that, at the very least, those flagged up have a right… pic.twitter.com/ecrUl3eAsb
— Claire Fox (@Fox_Claire) October 25, 2025
What information can banks share?
Banks will only be allowed to share limited information, such as:
- Account details (for example, sort code and account number)
- Basic account holder details (such as name and date of birth)
- Confirmation of how the account meets the eligibility indicator
- They are not allowed to share transaction histories or details of what someone spends their money on.
“Banks and other financial institutions could receive a penalty for oversharing information,” the DWP says, making clear that misuse of the power will carry consequences.
Will this automatically stop someone’s benefits?
No, and this is a key point. If an account is flagged, the information is combined with other data the DWP already holds to decide whether further inquiry is needed.
“A human will always be involved in any decision taken afterwards which may affect benefit awards or eligibility,” the department confirms, suggesting that some parts of the checking may be automatic or done by AI.
If an issue is identified for one benefit, it may also trigger a review of related benefits. For example, if someone is found ineligible for Pension Credit, their Housing Benefit may also be reviewed.
What safeguards and oversight is in place?
The DWP insists the powers will be tightly controlled.
Safeguards include:
- Independent oversight, with annual reporting to Parliament
- A Code of Practice, consulted on and approved before use
- Strict limits on purpose, data types, and organisations involved
- Penalties for banks that fail to comply or share too much information
- Secure data handling under UK GDPR and the Data Protection Act
“There will be independent oversight and reporting of Eligibility Verification powers to Parliament,” the department says.
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What should claimants do now?
For most people, the message is simple: make sure your details are up to date.
If your savings, investments, or circumstances have changed, reporting them early could prevent overpayments — and stressful clawbacks later.
The DWP argues that the goal is fairness, not punishment.
“This will mean that claimants are paid more accurately, more errors are found and resolved, and any suspected fraud can be identified and investigated sooner,” it says.
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