The Department for Work and Pensions (DWP) has provided fresh assurances to benefit claimants over concerns about new bank account checks, confirming that no payments will be automatically suspended based solely on financial data. The guidance comes as part of the UK Government’s response to a public consultation on new Codes of Practice linked to the Public Authorities (Fraud, Error and Recovery) Act 2025.
Under the new legislation, the DWP will have powers to issue Eligibility Verification Notices (EVNs) to banks and financial institutions, requiring them to verify information connected to certain benefit eligibility rules. These checks aim to help identify overpayments caused by fraud or error, including situations where claimants may have exceeded savings limits or spent more time abroad than permitted.
DWP Reassures Claimants
During the consultation, concerns emerged that benefit payments could be unfairly stopped simply due to bank account data. The DWP response emphasises that:
- Information obtained through an EVN will not trigger automatic suspension of benefits.
- All decisions will be reviewed by trained staff who will consider all relevant evidence before taking action.
- Claimants will be contacted and given an opportunity to respond if further clarification is needed.
- Hardship considerations will be factored in before any changes are applied.
A DWP spokesperson said the safeguards are designed to balance fraud prevention with the protection of claimants, and that all measures will initially be rolled out through a “Test and Learn” period. The rollout will be independently monitored, with findings reported to Parliament annually.
What Banks Can and Cannot Do
Under the proposed system, banks will receive eligibility criteria, not claimant names. They will be asked to search their records for accounts that meet specific conditions relevant to benefit rules. For example:
- Universal Credit savings rules: Accounts holding more than £16,000 could be flagged, as this exceeds the upper capital limit.
- Accounts with savings between £6,000 and £16,000 may also be highlighted, since payments reduce once capital surpasses the lower threshold.
- Indications that claimants may have spent more time abroad than allowed under benefit rules could trigger checks.
However, the guidance strictly limits the type of information banks can share. Financial institutions are prohibited from disclosing:
- Transaction histories
- Spending patterns
- Full financial statements
- Sensitive personal data such as religion, ethnicity, or political opinions
Importantly, no decisions about benefit entitlement will be made automatically based on bank data alone. Any information shared simply signals that further enquiry may be necessary.
Joint and Linked Accounts
The guidance also addresses complex account situations:
- Linked accounts (multiple accounts held by the same claimant) may be checked.
- Joint accounts may be considered when it is unclear which account holder is the claimant.
- Appointees or landlords receiving payments on behalf of claimants are also covered under specific rules.
- Any irrelevant information is destroyed in line with data protection regulations.
Test and Learn Rollout
The DWP will initially implement the system with a limited number of financial institutions to test procedures, safeguards, and digital systems before a broader rollout. Banks will have rights to request internal reviews and can appeal EVNs through the First-tier Tribunal.
Why These Checks Are Being Introduced
The DWP’s latest fraud and error statistics highlight the need for early intervention. In the financial year ending 2026:
- £9.9 billion was overpaid across the benefits system.
- Universal Credit accounted for the largest proportion of overpayments.
- Fraud linked to earnings, savings, and living arrangements represented a significant share of these errors.
The new verification process aims to identify incorrect payments sooner, preventing claimants from accumulating large debts due to overpayments and ensuring taxpayer money is better protected.
Safeguards and Oversight
- All EVN processes will be independently reviewed every 12 months.
- The public, charities, representative organisations, and businesses participated in the consultation, with 61 formal responses received.
- The DWP has confirmed that it will not publish the exact eligibility indicators used to flag accounts, citing the risk that individuals committing fraud could use the information to evade detection.
The Public Authorities (Fraud, Error and Recovery) Act 2025 is the legal basis for EVNs. All guidance is publicly available in the UK Government consultation response, which can be read here.
FAQs
1. What is an Eligibility Verification Notice (EVN)?
A legal notice issued to banks requiring them to check accounts against specified criteria linked to benefit eligibility.
2. Will my benefits be stopped automatically if my account is flagged?
No. All information is reviewed by trained DWP staff before any action is taken.
3. Can banks see my personal transaction history?
No. Transaction histories, spending patterns, and sensitive personal data will not be shared.
4. What is the purpose of these checks?
To prevent and identify incorrect benefit payments caused by fraud or error, protecting both claimants and taxpayer funds.
5. Will all banks participate immediately?
No. The system will first be tested with a small number of banks during a “Test and Learn” period.
6. How often will the system be reviewed?
Independent oversight is conducted annually, with findings reported to Parliament.
