Can the DWP really check your bank account?

New legislation will give the Department for Work and Pensions (DWP) powers to require banks to carry out certain checks linked to benefit eligibility. 

The new powers are part of the Public Authorities (Fraud, Error and Recovery) Act, which received Royal Assent in December 2025. 

According to DWP figures, benefit fraud and error resulted in £9.5bn of overpayments in 2024-25, equivalent to around 3.3% of total benefit spending. The government says the new powers are expected to help save £1.5bn by 2030.

Here, Which? explains what the DWP’s new powers are, how they’re expected to work and what protections are in place for benefit claimants.

How will the new powers work?

Currently, the DWP uses HMRC data to automatically verify income, but it relies on claimants to accurately report their savings and the amount of time they spend abroad. When these details are misreported, a claimant may end up receiving more money than they are entitled to.

The new powers are known as Eligibility Verification Measures (EVMs). These require banks and other financial institutions to use their own data to identify bank accounts held by people claiming certain DWP benefits that may not meet specified eligibility rules. 

The government will provide banks with a list of ‘eligibility indicators’ to make these checks, and while the full list will not be published, the DWP has shared two examples, which are: 

• If an individual has more than £16,000 in savings while claiming universal credit 
• Appears to be abroad for more than four weeks despite receiving pension credit.

Banks will need to screen any account that receives DWP benefit payments, as well as other accounts you have with that same bank, to see if there are any mistakes or signs of fraud.

If a bank identifies a potential issue, it will inform the DWP of the account holder’s name and date of birth, as well as basic account details such as the sort code and account number. Once the DWP receives a flag, it will apply its standard investigative procedures to decide whether benefit payments need to be adjusted or recovered.

No decisions about benefit entitlement will be made based on this information alone, and the new powers will not give the DWP direct access to bank account or financial account data.

The DWP says it will work with the 15 biggest banks in the UK, which include Barclays, HSBC, Halifax, NatWest, Santander and others.  

• Find out more: what is universal credit?

Which benefits are covered?

At the moment, three benefits are included within the scope of these powers:

• Universal Credit
• Pension Credit
• Employment and Support Allowance (ESA).

However, the law leaves open the possibility of additional benefits being added. The state pension is 'explicitly excluded' from the power and can't be added by regulations.

• Find out more: over-60s benefits.

How the DWP will recover benefit debts

If the DWP identifies a benefit overpayment, it will usually follow this process:

1. If you’re still claiming benefits, the DWP will normally recover the money by reducing your future payments until the debt is paid back.
2. If you’re no longer claiming benefits, you’ll usually be asked to repay the money in full or agree on a monthly repayment plan you can afford.
3. If you don't respond or engage, the DWP will try to contact you several times by phone or letter to explain the overpayment and agree how the debt should be repaid.
4. If the DWP is still unable to reach you, it can ask a bank for limited information, such as up to three months of statements, to assess whether you can afford to repay the debt. This can apply to any bank where you hold an account, not just the one your benefits were paid into.
5. If the DWP decides you can afford to repay the debt, it will write to you to say it intends to take money directly from your bank account using a direct deduction order. You’ll have one month to challenge the decision.
6. If you don't challenge the decision or respond, the DWP can instruct your bank to begin deducting money until the debt is repaid. Your bank may also charge an administrative fee, which could be taken from your account.

Find out more: pension credit explained.

What protections are in place for claimants? 

The legislation includes safeguards designed to protect claimants. 

Every case flagged by a bank must be reviewed by a DWP officer before any action is taken. Banks aren't allowed to share full bank statements or detailed information about how you spend your money.

Banks are also banned from sharing sensitive personal data, such as information about your race, religion or political views, and can face penalties if they share more information than they are allowed to. 

Any data used must be handled in line with UK GDPR and the Data Protection Act 2018. The information can't be used to presume that a claimant is guilty of fraud and can only be used to verify benefit entitlement.

There will also be independent oversight of the legislation, with an independent reviewer required to report annually on how the powers are used.

If you believe the DWP has made a mistake or wrongly flagged your account, you have the right to challenge the decision. 

In limited circumstances, the DWP can apply to a court to suspend someone’s driving licence if they persistently refuse to repay a benefit debt of £1,000 or more, despite having the means to do so.

This is intended as a last resort and would not apply where a licence is essential for work or caring responsibilities. Any disqualification would remain in effect until the debt is repaid and wouldn't result in penalty points or a criminal record.

• Find out more: how much universal credit will I get.

When will the new rules be introduced?

Although the new rules have become law, they haven't yet been implemented. This will only happen once the DWP’s official Code of Practice has been developed. 

A public consultation opened in December and will run until 27 February 2026. Once these codes have been laid before Parliament, an implementation date will be confirmed.