UK Introduces Bank Checks To Detect Benefit Fraud

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The United Kingdom government has introduced new bank-checking measures to identify possible welfare benefit fraud, with the scheme expected to save taxpayers £1.2 billion by 2030/31.

The Department for Work and Pensions (DWP) announced on Monday that it had issued its first Eligibility Verification Notice to a financial institution, marking the initial use of the new powers.

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Under the Eligibility Verification Measure, banks will be required to check relevant accounts against specified benefit eligibility criteria and flag cases where further enquiries may be necessary.

The checks are designed to identify claimants who may have savings above permitted limits or have spent longer outside the country than their benefit rules allow.

The measure was introduced under the Public Authorities (Fraud, Error and Recovery) Act 2025 and forms part of the government’s wider plan to save £14.6 billion over five years by tackling fraud, payment errors and unpaid debts.

Minister for Innovation, Fraud and Debt, Lilian Greenwood, said the powers would help authorities address deliberate abuse of the welfare system while ensuring eligible people continued to receive appropriate support.

She said the government was not interested in claimants’ shopping habits or how much they spent on clothes, but in identifying cases where eligibility requirements might no longer be met.

The DWP clarified that the measure would not give it direct access to claimants’ bank accounts, full transaction records or spending habits.

It also stressed that a flagged account would not automatically indicate fraud or wrongdoing. Any decision about benefit entitlement would require further assessment by departmental officials, with the information obtained through the checks not being sufficient on its own to determine a claim.

The measure initially applies to Universal Credit, Pension Credit and Employment and Support Allowance. It will begin with a controlled test-and-learn phase, subject to independent oversight, before any wider rollout.

The government also plans to introduce additional anti-fraud measures, including deploying 2,000 more specialists to Jobcentres and strengthening checks on Universal Credit claims involving people living abroad.

The DWP estimated that fraud and errors involving undeclared savings and time spent abroad in relation to Universal Credit and Pension Credit cost taxpayers £1.5 billion in 2025/26. It put the overall rate of benefit fraud and error at 3.2 per cent during the same period.