- The new system covers Universal Credit, Pension Credit and Employment and Support Allowance.
- The DWP estimates that fraud and error involving undeclared savings and time spent abroad cost £1.5bn in 2025-26.
- The eligibility verification measure is expected to generate £1.2bn in savings by 2030-31.
The Department for Work and Pensions (DWP) has issued its first Eligibility Verification Notice, requiring banks and other financial institutions to check information relating to certain benefit-receiving accounts as part of a new effort to tackle fraud and incorrect payments.
The system applies to Universal Credit, Pension Credit and Employment and Support Allowance (ESA). It is designed to identify cases where claimants may have savings that affect their entitlement or have spent longer abroad than benefit rules permit.
However, the new powers do not give DWP officials direct access to people's bank accounts, transaction histories or spending habits.
Instead, financial institutions will be asked to check relevant accounts against specified eligibility criteria and flag cases that may require further investigation. A flag does not mean that someone has committed fraud or broken benefit rules.
The Government has also stressed that no decision about a person's benefit entitlement can be made solely on the information supplied through the system.
Undeclared savings and overseas stays under scrutiny
Undeclared savings and the time claimants spend outside the UK are among the areas targeted by the new checks.
The DWP estimates that fraud and error involving undeclared savings and time spent abroad in relation to Universal Credit and Pension Credit cost taxpayers £1.5bn in 2025-26.
The Eligibility Verification Measure is expected to deliver £1.2bn in savings by 2030-31.
Minister for Innovation, Fraud and Debt Lilian Greenwood said: “Benefit fraudsters should be looking over their shoulder. These new powers will help us crack down on those who deliberately abuse the system, while ensuring people receive the right support at the right time.
“We are not interested in where people do their weekly shop or how much they’re spending on new clothes. Banks will simply be asked to identify if somebody may no longer meet the rules for the benefits they receive, allowing us to investigate further where necessary.
“With £1.2 billion in savings expected by 2030/31, this is a major step forward in tackling fraud and error, protecting public money and ensuring support goes to those who genuinely need it.”
Anyone flagged through the system will not automatically have their benefits stopped. The DWP says further enquiries will be necessary before any action is taken.
The measure is initially being introduced through a test-and-learn phase and will be subject to independent oversight before any wider rollout.
Wider crackdown on benefit fraud
The powers were introduced under the Public Authorities (Fraud, Error and Recovery) Act 2025 and form part of the Government's wider efforts to reduce incorrect benefit payments and protect public funds.
The Government is also planning to deploy an additional 2,000 anti-fraud specialists to Jobcentres and introduce tougher checks involving Universal Credit claims from people who have travelled abroad.
The wider package of measures is expected to save taxpayers £14.6bn over the next five years.
For claimants, the distinction between an eligibility flag and a finding of wrongdoing will be important as the new system develops. The DWP says the checks are intended to identify cases for further investigation, rather than automatically penalise people receiving benefits.
