Millions relying on state support face a quiet shift in how their finances are watched, with banks set to help.
From April 2026, new powers planned under the Public Authorities (Fraud Error and Recovery) Bill would let the Department for Work and Pensions use data from banks to spot possible ineligibility and overpayments. Ministers want a phased, “test and learn” rollout through to 2029–2031, with checks designed to catch errors early and clamp down on fraud without routine snooping.
What is changing and when
The DWP intends to require banks and building societies to run automated checks against accounts linked to benefit payments. Financial firms would flag “eligibility indicators” instead of handing over a full transaction history by default. The department would only request extra detail if a flag triggers.
Rollout starts in April 2026, with a national programme expected to complete between 2029 and 2031, subject to Parliament’s approval.
Officials say the approach targets risk and reduces blanket surveillance. The goal is to improve accuracy, prevent overpayments before they build up, and recover public money more quickly when rules have been broken.
Which benefits are in scope
The government has signalled that eight DWP-administered payments are expected to be covered at launch, with the exact list finalised in regulations. The focus sits on means-tested support, but some non-means-tested benefits may face limited checks for specific risks such as residency or overlapping claims.
- Universal Credit
- Pension Credit
- Income Support
- Jobseeker’s Allowance (income-based)
- Employment and Support Allowance (income-related)
- Carer’s Allowance
- Personal Independence Payment
- Attendance Allowance
For Universal Credit and Pension Credit, capital and income thresholds matter. For disability and carer benefits, checks may look at factors such as residence, overlapping entitlements, or work patterns rather than savings.
How the checks will work
The DWP will issue Eligibility Verification Notices to banks, listing data points to match. Firms will run periodic sweeps across accounts that receive DWP benefits. An alert prompts the DWP to request further information and, if needed, open a case review.
Banks will not share full statements unless a flag fires. The first pass involves minimal data to confirm whether a risk indicator exists.
Proposals also include faster recovery of certain debts owed to the state, possibly by arranging direct deductions without a court order in defined circumstances. Safeguards and appeal routes would remain, according to officials.
Examples of potential “eligibility indicators”
- Capital balances above £16,000 for households on Universal Credit.
- Sustained capital growth that could change Pension Credit entitlement.
- Regular overseas card use suggesting a claimant may be living abroad.
- Large, unexplained cash deposits inconsistent with declared income.
- Multiple current accounts receiving different benefits at the same time.
- Frequent high-value incoming payments indicative of undeclared work.
The department says it will refine these rules during pilots to reduce false positives and avoid disproportionate intrusion.
Privacy safeguards and concerns
Privacy campaigners and anti-poverty charities have raised alarms about mass data sweeps and the risk to vulnerable claimants. Ministers argue the checks will be tightly targeted and subject to data protection law. Independent oversight is expected, with audit trails on how data is used.
Banks will flag risk, not opinions. The DWP must still make a decision using benefit law, and claimants keep rights to challenge that decision.
Under current rules, the DWP can ask for transaction data when it has reasonable grounds to suspect fraud. The bill widens early-stage data-matching so problems surface sooner, including genuine mistakes.
Key thresholds and what might trip a flag
For Universal Credit, the capital limit remains central. Savings and investments above £16,000 usually end entitlement. Between £6,000 and £16,000, a “tariff income” is assumed and reduces the award.
| From | What happens | Who is affected |
|---|---|---|
| April 2026 | Pilots start, banks match accounts to risk indicators | Selected claimants on the eight listed benefits |
| 2027–2029 | Gradual expansion, refined rules and oversight | Wider regional rollout |
| 2029–2031 | Full national programme if Parliament approves | Most claimants on in-scope benefits |
A quick Universal Credit example
Assume a single claimant has £14,500 in savings. A £2,500 inheritance takes capital to £17,000. This crosses the £16,000 ceiling, so Universal Credit would normally stop. If savings later fall below £16,000, the person can reclaim, but they must report changes promptly.
Tariff income also matters. If savings sit at £9,000, the amount above £6,000 is £3,000. Universal Credit treats that as £4.35 per £250 per month. £3,000 equals twelve £250 bands, so £52.20 a month is deducted from the award.
What to do if you are flagged
If the DWP opens a case, you can provide bank statements, wage slips, and explanations for transactions. Keep records of reported changes. Ask for more time if evidence takes a while to gather. You can request details of the indicator that triggered the check.
Disagree with a decision? You can seek a Mandatory Reconsideration. If still unhappy, you can appeal to a tribunal. Free advice agencies can help you understand options and deadlines.
How to reduce the risk of problems
- Report changes to savings, work, household and travel as soon as they happen.
- Keep copies of letters, online journal entries, and bank records.
- If you hold several accounts, make sure you declare them all on claims and reviews.
- Note any temporary, ring-fenced funds such as bereavement payments or backdated awards.
- Tell the DWP if you go abroad and check the rules for your benefit on absences.
Why the DWP says it is doing this
Ministers point to social security fraud and error costing billions each year. They want to stop overpayments before they snowball. Banks already match data for tax and anti-money laundering; this extends the approach to benefits, with targeted criteria and legal gateways.
The department says most claimants act honestly and will never be contacted. The focus sits on unusual patterns that suggest a change in circumstances, not everyday purchases like groceries or utility bills.
Extra context for claimants
Non-means-tested benefits such as Personal Independence Payment and Attendance Allowance are not based on income or savings. Checks there may focus on whether someone still meets the conditions, lives in the UK as required, or is overlapping with another benefit or benefit abroad. Evidence can include medical assessments, travel history, and care arrangements rather than bank balances alone.
For mixed households, one person’s savings can affect a partner’s means-tested entitlement. Map out your capital across joint and sole accounts. If a lump sum is due, such as a redundancy payment, plan for its impact on benefits. Short-term budgeting loans, advance payments, and debt advice may help during transitions.
Is there a clear appeals path if a bank flag is wrong? False positives could hit vulnerable claimants—what safegaurds kick in before payments are stopped?
Calling this “targeted” feels optimistic. Automated sweeps across millions of acounts is mass data trawling by any other name. Oversight better be more than a press release.