The Department for Work and Pensions (DWP) is set to introduce sweeping new anti-fraud measures that will allow officials to check the bank accounts of benefit claimants, and experts are urging people to seek advice if they are unsure about their eligibility. The new powers, which have been approved by Parliament, will initially target those receiving Universal Credit, Employment and Support Allowance (ESA), and Pension Credit, with a test phase due to begin later this year.
New powers to verify eligibility
The DWP has been granted a new power called the eligibility verification measure, which will enable the department to contact bank providers and order them to search through accounts linked to certain benefits. Banks will then flag any accounts that may not be eligible for payments, prompting further investigation by the DWP. The legislation has already been approved, and a test phase for the new bank account checks is scheduled to start later in 2026.
Debt support group Money Wellness has warned that the rules can be "difficult to understand" and that many claimants may not realise how their savings affect their benefit entitlement. The organisation fears that "genuine mistakes" could be caught out by the new measures, rather than deliberate fraud.
'Genuine mistakes' more common than fraud
Rebecca Lamb, external relations manager at Money Wellness, said: "In our experience, we see far more genuine mistakes than deliberate fraud. The rules can be difficult to understand, especially when you're already dealing with financial pressure." She added: "The DWP's own statistics recognise that some overpayments happen because people couldn't reasonably have been expected to know they needed to report a change, which shows just how complicated the system can be."
The new powers will initially check the bank accounts of those receiving Universal Credit, ESA, and Pension Credit, but this could be expanded to other benefits in the future. The DWP has stated that a "test and learn phase" will begin later in 2026, and that it is working closely with the banking industry to ensure the powers are used "safely and effectively".
Claimants urged to act now
Ms Lamb urged any claimants concerned about the new checks to act now, rather than waiting for a potential issue to arise. She said: "If you're not sure whether your savings or income could affect your benefits, don't leave it to chance. Getting advice early can help you avoid problems further down the line and make sure you're receiving the right support. It’s always worth checking if you’re unsure."
She explained that help is available for those who need it: "You can speak to us, or other advice organisations. Alternatively get in touch with the DWP directly. The sooner you ask for help, the easier it usually is to put things right and avoid unexpected overpayments or repayments later on."
How savings affect benefit entitlement
Several benefits are means-tested, meaning that your wider financial situation, including other income and savings, can impact your entitlement. This is the case for both Universal Credit and Pension Credit, which millions of people claim.
For Universal Credit, claimants get a reduced payment if they have savings of more than £6,000. You lose £4.35 of your monthly payment for every £250 in savings above this level. You won't receive any Universal Credit payment if your savings exceed £16,000. Any earnings can also reduce your entitlement, with your payment falling by 55p for each £1 you or your partner earns.
Similar reductions apply for Pension Credit, which is for people of state pension age. Your entitlement reduces if you have over £10,000 in savings and investments. The DWP rules state that for each £500 you have above this level, this counts as £1 a week of income, thus reducing the income top-up you get through the benefit.
What happens if your account is flagged?
The DWP has confirmed that any account information obtained through the checks will only be used to identify incorrect payments. These details on their own will not lead to a person's benefit being reduced or stopped. If a bank account is flagged up, a trained DWP official will look at the case and will consider "all relevant information" before deciding on what further action to take.
Money Wellness advises claimants to double-check their savings and income against the current rules, especially if they have experienced changes in their circumstances. The organisation stresses that early advice can prevent future overpayments and the stress of having to repay money.
