Millions relying on benefits face a new phase of financial checks, as ministers power up anti-fraud tools and critics raise alarms.
The Department for Work and Pensions will switch on bank account monitoring from April 2026, aiming to cut fraud and error while promising strict oversight. Supporters point to big savings for public services. Campaigners warn about privacy, fairness and the risk of false flags.
What is changing and when
The Public Authorities (Fraud, Error and Recovery) Bill gives the DWP powers to require banks to screen accounts linked to benefit claims for signs that do not match entitlement rules. The programme is scheduled to begin in April 2026, subject to parliamentary scrutiny and implementation work with lenders.
Peers are examining the legislation in detail, with sessions set for 15 October and 21 October. Ministers say the new powers will help “safeguard public funds” and tighten checks before overpayments build up.
Rollout from April 2026 will bring routine checks on accounts tied to benefit claims, with banks alerting the DWP to potential mismatches.
Financial penalties will be available as an alternative to court action, pitched by ministers as a deterrent where criminal prosecution is not pursued.
Who will be targeted first
Officials are expected to prioritise means‑tested benefits where savings, capital and income directly affect entitlement:
- Universal credit: capital over £16,000 normally disqualifies a claim; balances between £6,000 and £16,000 can reduce awards.
- Pension credit: no upper capital limit, but savings over £10,000 are treated as generating assumed income that can reduce payments.
- Employment and support allowance (income‑related): capital rules mirror other means‑tested support, while new style ESA is not means‑tested.
The first wave is expected to focus on universal credit, pension credit and income‑related ESA claimants.
What banks will look for
Participating banks will run automated checks to identify indicators that may conflict with a person’s declared circumstances. The government says these checks will produce signals, not automatic decisions, and that trained staff will review any alerts before action is taken.
The DWP says bank‑supplied data is separate from DWP algorithms and that every signal will be assessed by a human caseworker.
Ministers also stress that information will not be gathered on the presumption of guilt. The aim, they argue, is to spot problems early and prevent large debts from accruing.
Why ministers say this is needed
The government forecasts £1.5 billion in savings over five years from the new powers, feeding into a wider plan to save £9.6 billion by 2030. That money, they argue, can be redirected to frontline services while protecting taxpayers.
Officials link the monitoring to a broader fraud and error drive across the public sector, including enhanced eligibility checks and new recovery tools where overpayments occur.
Privacy fears and Horizon warnings
Charities and civil liberties groups have voiced concerns, including Disability Rights UK, Age UK, Privacy International, Child Poverty Action Group and Big Brother Watch. They argue that “suspicionless” mass screening risks harming people who have done nothing wrong and could replicate the dynamics that fuelled the Post Office Horizon scandal.
Pensioners, disabled people and carers should not feel watched by default, campaigners argue, warning of wrongful flags and distress.
Ministers reject those claims and say robust oversight and reporting rules will apply. They insist the approach is proportionate and focused on clear entitlement rules.
Key dates and numbers at a glance
| Milestone | Date | What it means |
|---|---|---|
| House of Lords scrutiny | 15 October and 21 October | Detailed line‑by‑line examination of the Bill |
| Planned start of bank checks | April 2026 | Banks begin screening accounts linked to claims |
| Projected savings from new powers | 2026–2031 | £1.5bn over five years |
| Wider fraud and error plan | By 2030 | Targeted savings of £9.6bn |
What you can do now
Claimants can reduce the chance of a misunderstanding by keeping their records tidy and up to date. Simple steps lower the risk of a flag turning into a dispute.
- Report changes quickly: savings, work income, partner moves, and household changes can alter entitlement.
- Keep evidence: bank statements, payslips, inheritance letters and ISA statements help resolve questions fast.
- Understand the thresholds: for universal credit, capital above £16,000 usually ends entitlement; for pension credit, capital over £10,000 is treated as tariff income.
- Separate finances where appropriate: joint accounts can complicate assessments if household circumstances change.
- Check your claim details match your banking: names, addresses and declared accounts should be consistent.
Common mismatches that can trigger questions
Alerts are more likely where bank data appears inconsistent with a claim. Examples include large, regular deposits that look like undeclared earnings; a sudden increase in savings that moves a person above a capital threshold; or multiple active accounts that have not been declared on a means‑tested claim. A human caseworker should examine context, such as one‑off gifts, insurance payouts or a temporary second account during a switch.
Penalties, overpayments and your rights
If an alert leads to a finding that money was overpaid, the department can recover the debt. In some cases, fixed financial penalties may be offered as an alternative to prosecution. People retain the right to challenge decisions: request a mandatory reconsideration and, if needed, appeal to an independent tribunal. Keeping clear paperwork and timelines helps if you need to contest an outcome.
What to expect between now and April 2026
Banks and the DWP will need time to agree data-sharing mechanisms, governance and staff training. The department says new oversight and reporting rules will apply from day one. Guidance for claimants is likely to be published closer to rollout, setting out how checks work, what is screened and how disputes are handled.
For households planning ahead, a short self‑check can help: list all accounts in your name, note current balances, and compare them to your claim. If something has changed, update your details before April 2026. That reduces stress and the chance of avoidable debt once the new screening begins.
Quick question: will joint accounts be screened if only one of us claims Universal Credit? My partner doesn’t claim, but our shared bills account shows both names. Could that be flagged as a mismatch even when it’s declared? Also, are address typos definetely reviewed by a human first?