From April 2026, millions of benefit claimants will see their bank accounts monitored by financial institutions under sweeping new fraud-detection powers.
Banks will be required to run automated checks on people receiving state support and flag those who may no longer be eligible.
The Department for Work and Pensions (DWP) says this marks a major change from current rules, which only allow access to financial records if there are reasonable grounds for suspicion.
Under the new system, continuous automated surveillance will apply to all claimants of means-tested benefits.
Banks will not review every transaction or spending habit. Instead, they will use data tools to detect clear eligibility markers, such as whether a claimant has more than £16,000 in savings, the cut-off for Universal Credit.
If a red flag is triggered, the bank must issue an “Eligibility Verification Notice” to the DWP. Only accounts showing signs of ineligibility will be investigated further.
Seven benefits will fall under the scheme:
- Universal Credit
- Housing Benefit
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Council Tax Support
- Pension Credit
Ministers estimate the regime will save around £940million over five years by preventing overpayments and identifying fraud earlier.
Currently, investigators must establish suspicion before examining finances, but this safeguard will be removed once the reforms take effect.
Privacy campaigners have raised concerns about financial surveillance of vulnerable people.
DWP to check bank accounts of millions
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GETTYHowever the DWP insists protections will be in place.
A spokesperson said: “Claimants are paid more accurately, more errors are found and resolved, and any suspected fraud can be identified and investigated sooner.”
The rollout will begin in 2026 and gradually expand until all seven benefits are covered by the early 2030s.
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Consumer experts recommend that anyone receiving means-tested benefits should keep accurate records of their income
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PAConsumer experts recommend that anyone receiving means-tested benefits should keep accurate records of their income and savings to avoid confusion when the new system launches.
Pensioners in receipt of Pension Credit are advised to check regularly that their savings remain below the £16,000 threshold to protect their entitlement.
The government maintains that the reforms are designed to protect taxpayers’ money while ensuring support reaches those who genuinely need it.
Ministers say the new system will speed up fraud detection and reduce costly overpayments that can leave claimants facing unexpected repayment demands further down the line.