The UK Government is stepping up its fight against benefit fraud with new powers that will change how people’s claims are checked. From April 2026, the Department for Work and Pensions (DWP) will begin using stronger eligibility checks, including new powers to monitor bank accounts and verify information automatically.
These changes are part of a major new law the Public Authorities (Fraud, Error and Recovery) Bill which the Government says will help save taxpayers £1.5 billion over the next five years.
While ministers insist the measures are aimed at protecting public money and improving fairness, critics are warning that they could lead to unnecessary intrusion into people’s private finances particularly pensioners, carers, and disabled claimants.
So, what exactly is happening? How will these new powers be used? And should you be worried if you claim benefits such as Universal Credit, Pension Credit, or Employment and Support Allowance (ESA)?
What the Government Is Planning
The new Public Authorities (Fraud, Error and Recovery) Bill gives the DWP greater powers to access information directly from third parties, including banks.
According to the Government, this will help detect fraud early, stop incorrect payments, and recover money faster when overpayments occur.
At the heart of the plan is something called the Eligibility Verification Measure a system that allows the DWP to collect and analyse data to confirm whether someone’s financial situation matches the details in their benefit claim.
This means that from April 2026, the DWP will be able to run regular automated checks on bank accounts linked to benefit payments.
It’s part of a wider government effort to modernise the welfare system by using technology and data to prevent mistakes not just catch them after they happen.
Officials say these checks won’t be done on a whim. Instead, they’ll use what’s called a “test and learn” approach meaning they’ll introduce the process gradually, studying the results carefully before expanding it further.
The DWP’s Explanation
In an official statement, the DWP said:
“For the Eligibility Verification Measure, the Government will implement a ‘test and learn’ approach to ensure the new powers to tackle public sector fraud are being used proportionally and effectively. The DWP and the Cabinet Office will continue to work with industry to implement the new measures, consult stakeholders on Codes of Practice, and publish guidance.”
The department insists that this isn’t about targeting individuals or assuming anyone is guilty.
It added:
“Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”
In other words, they say these checks are about accuracy, not accusation.
Why the Crackdown Is Happening
The DWP has long faced pressure to reduce benefit fraud and overpayments, which together cost billions of pounds every year.
In 2023-24 alone, it estimated £8.3 billion was lost through fraud and error in the benefits system. That includes everything from people accidentally giving the wrong information to deliberate attempts to claim money they’re not entitled to.
The DWP argues that new powers are essential in a world where fraud is becoming more sophisticated. Officials say criminals are using fake identities, falsified documents, and online scams to cheat the system and that technology must evolve to keep up.
By giving the department more direct access to bank data, ministers believe they can quickly spot when something doesn’t add up for example, when someone’s account balance or spending patterns suggest undeclared income or savings above the legal threshold.
But critics say this “mass surveillance” approach could mean innocent people getting caught up in automated investigations, especially if algorithms misinterpret ordinary banking behaviour.
What Benefits Are Being Targeted First
Experts believe the DWP will focus on three major benefits first:
- Universal Credit The largest benefit in the UK, supporting people on low incomes, out of work, or unable to work.
- Pension Credit Support for older people on lower incomes, often combined with State Pension.
- Employment and Support Allowance (ESA) Paid to people with illnesses or disabilities that affect their ability to work.
These benefits cover millions of people, meaning the new measures could touch a large portion of the population.
The DWP says these checks will help ensure that people are only paid what they’re entitled to — no more and no less.
How the New System Will Work
The new Eligibility Verification Measure will allow the DWP to collect data directly from financial institutions mainly banks to confirm details such as:
- Whether someone still lives in the UK (based on where their transactions happen).
- Whether a person’s savings are higher than what’s allowed under benefit rules.
- Whether they have multiple accounts that haven’t been declared.
- Whether they’re earning or receiving payments not reported to the DWP.
This doesn’t mean every transaction will be watched in real time. Instead, the system will use data-matching technology algorithms that flag unusual patterns to identify possible errors or risks.
If the system spots something that doesn’t match DWP records, it could trigger a manual review or contact with the claimant to clarify details.
The Government says this is no different from what already happens when data is shared between HMRC, banks, and other agencies the only difference is that it will now be faster and more automated.
What the DWP Says About Privacy
The DWP insists that privacy will remain a top priority. Officials say the system will follow strict rules set out in the Data Protection Act and will be overseen by regulators to prevent misuse.
They also emphasise that the new powers will not give them unlimited access to everyone’s personal transactions.
Instead, banks will be asked to supply specific, limited information to verify eligibility — such as whether a claimant’s balance or income exceeds benefit limits.
DWP officials say the data will only be used for fraud prevention and recovery purposes, not for any other government activity.
However, this hasn’t fully reassured campaigners.
Growing Public Concern and Backlash
Several well-known organisations — including Disability Rights UK, Age UK, Privacy International, Child Poverty Action Group, and Big Brother Watch — have publicly criticised the new powers.
In an open letter to the Government, they warned that:
“Imposing suspicionless algorithmic surveillance on the entire public has the makings of a Horizon-style scandal – with vulnerable people most likely to bear the brunt when these systems go wrong.”
That reference to the Horizon scandal where faulty software wrongly accused hundreds of Post Office workers of fraud struck a chord with many.
Their concern is that once large-scale automated systems are introduced, mistakes can happen — and when they do, it’s often the most vulnerable who suffer first.
The letter went on to say:
“Pensioners, disabled people, and carers shouldn’t have to live in fear of the government prying into their finances.”
The DWP’s Response
In response, a spokesperson for the DWP dismissed those fears, calling them “false and misleading.”
They said:
“These claims are false. We are not introducing blanket surveillance. Our measures are proportionate and designed solely to protect taxpayers’ money and ensure fairness in the welfare system.”
The department insists the changes are about efficiency, not intrusion — and that law-abiding claimants have nothing to fear.
Ministers have repeatedly said that most people who claim benefits do so honestly, and the goal is to prevent fraudsters from taking advantage of the system and diverting funds away from those who genuinely need them.
What This Means for You
If you currently receive benefits like Universal Credit, Pension Credit, or ESA, here’s what to expect:
- Routine checks will become more automated. The DWP will use data-matching tools to confirm information instead of relying solely on paperwork or random spot-checks.
- Your bank may be required to share certain data. This will usually be limited to high-level information like balance ranges, not individual purchases.
- You’ll still have rights to privacy and appeal. If something is flagged incorrectly, you’ll be able to challenge it, just as you can with any DWP decision now.
- If your claim is correct, you won’t be affected. Honest claimants won’t lose their benefits or have money taken away. These checks are designed to spot serious discrepancies, not punish minor mistakes.
That said, it’s wise to keep your information up to date. Always report changes in your income, savings, or living situation promptly. This helps ensure your record matches what’s in your bank data, preventing unnecessary flags.
Why Critics Say the Bill Could Go Too Far
The main criticism is about scale and fairness. Opponents argue that the new powers treat everyone as a potential suspect instead of focusing only on high-risk cases.
Privacy campaigners worry that mass data-sharing could set a dangerous precedent, giving public authorities more control over people’s private financial lives.
Some legal experts also question whether “algorithmic surveillance” — where automated systems analyse personal data could lead to biased or inaccurate results.
They point out that algorithms can make errors, misinterpreting everyday spending or savings as “suspicious,” especially among people whose financial lives are complicated or irregular.
For example, someone who temporarily holds money for a family member, or receives cash gifts, could see their account flagged even if they’ve done nothing wrong.
That’s why campaigners are urging the Government to build strong safeguards and independent oversight into the new system before it launches.
What the Government Promises
Ministers say the new measures won’t be rushed. Between now and 2026, the DWP will:
- Run pilot schemes to test the technology and identify problems early.
- Consult charities, banks, and data experts to ensure checks are fair and proportionate.
- Publish a Code of Practice explaining exactly how the powers will be used.
- Review the impact of the system regularly once it goes live.
Officials stress that the focus is on fraud prevention and system efficiency — not “spying” on individuals.
They also argue that most public services already share data to prevent error. For example, HMRC, councils, and the NHS all use similar data-matching techniques to confirm identities or verify eligibility for free prescriptions, tax credits, and council tax reductions.
The Broader Picture: Benefit Fraud and Public Trust
Benefit fraud is a sensitive issue in the UK. On one hand, there’s a strong public expectation that taxpayers’ money should be protected and that fraud should be punished. On the other, there’s a deep fear — especially among honest claimants that innocent people could be unfairly accused or penalised by automated systems.
The challenge for the DWP is balancing both priorities: maintaining trust and fairness while keeping the system secure.
Critics say that for years, government messaging about “cracking down on fraud” has unfairly painted benefit claimants as dishonest. They warn that aggressive monitoring could make people too scared to claim the help they genuinely need.
Disability and pensioner charities have called for reassurance that the DWP’s technology will undergo independent scrutiny and include human oversight before any action is taken against claimants.
Advice for Claimants
If you’re currently receiving benefits, you don’t need to panic but you should take a few sensible steps to stay prepared:
- Keep your details up to date.
Always report changes in your income, savings, household members, or work hours through your DWP journal or by phone. - Keep clear records.
If you receive payments from relatives, pensions, or part-time work, make a note of where they come from. That way, if the DWP ever asks for clarification, you can explain quickly. - Be honest on all forms.
Honest mistakes can happen, but deliberate misinformation can lead to overpayment recovery or even investigation. - Seek advice early if you’re unsure.
Organisations like Citizens Advice, Turn2Us, and Age UK can explain what’s safe to declare and how to manage your finances within the rules. - Know your rights.
If your payments are ever questioned or reduced, you have the right to appeal. The DWP must give you clear reasons for its decisions.
Voices From Both Sides
Government View:
Ministers say that new powers are crucial to modernise the welfare system. They argue that with over £8 billion lost each year to fraud and error, taxpayers deserve stronger protection.
One senior DWP official told the press:
“We owe it to the British public to ensure every pound of welfare spending goes to those who truly need it. These reforms will make the system fairer, faster, and harder for fraudsters to exploit.”
Campaigners’ View:
In contrast, campaigners say the real risk lies in the system itself — not in claimants.
Big Brother Watch director Silkie Carlo warned:
“This is the beginning of mass financial surveillance in the UK. If we normalise it for benefits, what’s next? It’s a dangerous path that could lead to mistakes, discrimination, and unnecessary distress for vulnerable people.”
What Happens Next
The DWP will spend the next year developing the system and consulting with banks, privacy experts, and disability groups.
Implementation will start in April 2026, beginning with pilot schemes before expanding nationwide.
The Government has promised transparency — saying full guidance and impact assessments will be published before the rollout begins.
If done correctly, the new measures could help save billions, reduce bureaucracy, and strengthen public trust. But if done poorly, they risk creating fear, confusion, and potential injustice among those who depend most on the welfare system.
In Summary
- The Public Authorities (Fraud, Error and Recovery) Bill gives the DWP new powers to check eligibility and monitor accounts from April 2026.
- It aims to save £1.5 billion over five years by cutting fraud and errors in benefits like Universal Credit, Pension Credit, and ESA.
- The DWP says data checks will be limited and proportionate, not mass surveillance.
- Critics warn of potential privacy violations and the risk of algorithmic mistakes.
- The system will be introduced gradually, with testing and consultation before full rollout.
For claimants, the key takeaway is simple: if your information is accurate and up to date, you have nothing to fear. These changes are aimed at improving efficiency, not punishing genuine people.