DWP sends banks its first notice to flag benefit accounts that may break savings or overseas rules
The checks cover Universal Credit, Pension Credit and New Style ESA, and the department says banks will not pass on statements or spending details.
Banks have been sent the first formal request under a new law that lets the Department for Work and Pensions ask them to spot benefit accounts where the rules on savings or time abroad may no longer be met.
The DWP confirmed on Monday that it had issued its first Eligibility Verification Notice. The power comes from the Public Authorities (Fraud, Error and Recovery) Act 2025, and the department puts the savings from it at £1.2bn by 2030/31.
Only three benefits are covered: Universal Credit, Pension Credit and New Style Employment and Support Allowance. Child Benefit, the State Pension and Personal Independence Payment are not part of it.
What banks will and will not share
The DWP gives banks a set of "eligibility indicators" based on the benefit rules, and the banks then check the accounts that payments go into, including linked and joint accounts. Where an account meets one of the indicators, the bank can pass on the names of the account holders, account numbers and sort codes, the balance, and the dates of any transactions made in another country.
Banks cannot send full statements, details of what people spend their money on, the locations of transactions or sensitive personal information. The department's guidance says it cannot log in to anyone's online banking or watch an account in real time, and that a bank which shares more than it is allowed to can be fined.
A flag on its own does not mean someone has done anything wrong, the department said, and no decision about a claim can be made using the bank's information alone. If a flag comes up, a member of DWP staff reviews the claim. People with an online account will be contacted through their journal; others may get a letter, a text or a phone call. Anyone who disagrees with the outcome can ask for a mandatory reconsideration.
The two areas being targeted are among the biggest causes of overpayments. The DWP estimates that undeclared savings and time spent abroad on Universal Credit and Pension Credit claims cost £1.5bn in 2025/26. Across the whole benefits system, it puts the rate of fraud and error at 3.2%.
A slow start, then the Budget
The checks will begin with a limited test phase and will be watched by an independent reviewer, whose reports go to Parliament. A statutory code of practice, consulted on earlier this year, sets out the safeguards banks and the department must follow.
The DWP also said that a further package will be set out in Wednesday's Budget. It includes 2,000 extra anti-fraud specialists working in Jobcentres and tighter checks on Universal Credit claims made by people who have left the country. The department puts the savings from that package at £1.4bn between 2027 and 2032.
Claimants are already required to report changes such as a rise in savings, a one-off payment or a trip outside England, Scotland and Wales. The Universal Credit helpline is 0800 328 5644 and the Pension Service helpline is 0800 731 0469.
