Fresh powers to verify benefit eligibility are on the way, promising savings for taxpayers and new scrutiny for millions.
From 2026, the Department for Work and Pensions plans to use bank account information in targeted checks on certain benefits. Ministers say the approach will cut fraud and error. A key exemption stands out, and watchdogs are already asking difficult questions about the impact and the cost.
What will change from 2026
New measures in the Government’s fraud and error programme will allow the DWP to request information about claimants’ bank accounts when it needs to verify eligibility. The department says the powers will be used for specific benefits with the largest levels of incorrect payments.
Targeted bank checks are due to start in 2026, focusing first on benefits with the highest overpayments.
The checks will sit alongside existing processes. Caseworkers will examine any anomalies before decisions are made. The department stresses that no automated system will make determinations on entitlement or sanctions without a person reviewing the file.
A human will make any decision that affects a claimant’s payments or eligibility.
Which benefits are in the first wave
The guidance points to three benefits in scope at the outset, with further additions possible only if Parliament approves them through affirmative regulations.
- Universal Credit
- Pension Credit
- Employment and Support Allowance
The focus is on preventing overpayments, verifying capital rules where they apply, and checking that personal circumstances align with what has been declared to the department. Where a discrepancy is identified on one benefit, the DWP may also verify linked entitlements.
For example, Pension Credit can passport claimants to Housing Benefit. If a Pension Credit review finds someone is not eligible, Housing Benefit may be reassessed as a consequence.
| Benefit | Included in initial checks | What DWP says it aims to verify |
|---|---|---|
| Universal Credit | Yes | Consistency between declared circumstances and financial activity that could affect entitlement |
| Pension Credit | Yes | Capital thresholds and changes that might stop or reduce entitlement |
| Employment and Support Allowance | Yes | Eligibility where payments are most prone to error or fraud |
| Housing Benefit | Indirectly | May be reviewed if linked benefits change after a verification check |
Who is exempt and why
State Pension claimants will not be subject to the new bank account checks. The DWP’s guidance is explicit that this payment is out of scope and cannot be added later by regulation.
State Pension is excluded from the data-gathering power and cannot be brought in by future regulations.
That position reflects the nature of the State Pension, which is based on National Insurance contributions and is not means-tested. Bank balances do not determine entitlement to this payment, so they fall outside the new verification regime.
Safeguards and criticisms
The Regulatory Policy Committee, an independent watchdog that reviews impact assessments, says the Government has understated the potential effects on vulnerable people. It argues that the analysis does not fully account for the risk that recovering overpayments caused by error could hit the poorest households hard.
Watchdogs warn the impact on the poorest may be understated and costs to banks remain unclear.
The committee also questions whether the assessment properly sets out the administrative burden on banks. It highlights the need for transparency about any costs if financial institutions must facilitate deductions or provide data responses.
The DWP expects the crackdown to save the public purse millions of pounds. Ministers say preventing incorrect payments will protect the system for people who are genuinely eligible.
What the checks could mean for you
Most claimants will see no change unless their case is selected for verification. If the DWP needs more information, it will issue an Eligibility Verification Notice requesting details. If you receive one, respond by the stated deadline and keep copies of any documents you send.
- Keep bank statements and records of changes in your circumstances.
- Report changes promptly through official channels to avoid overpayments.
- Read any DWP letters carefully and reply within noted timeframes.
- Ask for a mandatory reconsideration if you think a decision is wrong.
- Seek independent advice if you are unsure how to respond.
An example scenario
A claimant receives Pension Credit. Their savings rise after an inheritance, taking them over the capital limit for this means-tested benefit. A bank data query alerts the DWP to a possible mismatch with the information on file. The department requests evidence. A caseworker reviews the response. If Pension Credit stops, passported Housing Benefit is checked as well. State Pension payments, if any, continue unaffected because they are not part of the new checks.
This is not automatic clawback. The department states that a person assesses each case before any change to an award is made.
Key dates, questions and practical tips
The programme is slated to begin in 2026. The initial scope covers Universal Credit, Pension Credit and Employment and Support Allowance. Parliament would need to approve any expansion to other benefits.
If you are contacted, you can ask which benefit is being checked and what information is required. You can request extra time if you have a good reason. You can also challenge decisions and present additional evidence. Keep communication channels up to date with the DWP so letters and messages reach you.
Payments on the horizon
Separate from the fraud crackdown, some households could see combined DWP support of up to £1,085 in the run-up to Christmas, depending on individual entitlement and payment cycles. That figure will vary widely between households. It may reflect multiple awards falling in close succession, such as regular benefit payments and scheduled top-ups where applicable.
Plan your budget around confirmed award notices rather than estimates. If you expect a change in your circumstances before the end of the year, report it early to reduce the risk of overpayments, which the department may later recover.
How will the DWP stop wrongful recovery when overpayments stem from its own errors? The RPC flagged this risk. Will deductions be paused during mandatory reconsideration, and will people get enough time to respond to an Eligibility Verification Notice?