Worried the DWP could check your bank account? Here’s what you need to know

Millions of people claiming benefits could be affected by new government powers allowing banks to check certain information about their accounts.

But what does this mean for you?

If you're worried about your money, your privacy or your benefit payments, here's what you need to know.

Which benefits are affected?

The new checks will initially apply to people receiving three benefits:

• universal credit
• employment and support allowance (ESA)
• pension credit

The government could extend the checks to other benefits in the future.

The new system, known as the Eligibility Verification Measure, allows the Department for Work and Pensions (DWP) to ask banks to check certain information about accounts held by people claiming these benefits.

But this doesn't mean the DWP can simply look through your bank statements or see everything you buy.

Can the DWP see what’s in your bank account?

The new powers don’t give the DWP direct access to your bank account or let officials see where you spend your money.

Instead, the DWP will tell banks what to look for. Banks will then check their own records for information that could suggest someone is being paid benefits incorrectly.

If an account matches the checks, the bank may have to share specific information with the DWP.

Your bank carries out the checks. The DWP doesn’t get unrestricted access to your account.

What will the DWP be looking for?

The government has given two examples of what the checks could flag up:

• Savings above £16,000: if you claim universal credit and have more than £16,000 in savings, you may no longer qualify.  
• Spending more than four weeks abroad: if you claim pension credit and appear to have been abroad for more than four weeks, the DWP may want to check your circumstances.

These are just examples. The government hasn’t published the full list of checks banks will carry out.

And remember, if your account is flagged, it doesn't automatically mean you've done anything wrong. There may be a perfectly reasonable explanation.

Why is the DWP checking bank accounts?

The DWP says the aim is to identify benefits that may have been paid incorrectly and recover money that’s owed.

The new laws also give the department powers to recover certain debts directly from bank accounts when someone owes money to the DWP and refuses to pay.

Having your bank account flagged doesn’t automatically mean your benefits will stop. The DWP says the checks are intended to identify possible problems that need looking into, rather than automatically decide whether you qualify for benefits.

What happens if your account is flagged?

If the checks raise questions about your claim, the DWP may contact you to find out more.

Here's what could happen.

You'll be contacted

If you have a universal credit online account, you may receive a message in your journal. Otherwise, the DWP may contact you by phone, letter or text.

You may need to provide more information

The DWP might ask you to explain your circumstances or provide evidence.

If this happens, respond as soon as you can and make sure you understand what information is needed.

Your claim may be investigated further

The DWP may need to make further checks before deciding whether anything needs to change.

Being contacted doesn't automatically mean your benefits will stop.

A person will make the decision

The DWP has said decisions about your benefits will be made by its staff, not by AI alone.

You can challenge a decision

If you believe the DWP has made the wrong decision about your benefits, you can ask it to look at the decision again.

You can explain why you disagree and provide evidence to support your case.

What should you do now?

There's no need to panic just because these new checks are being introduced.

But it's important to keep your details up to date and tell the DWP about changes you're required to report.

Depending on the benefit you claim, this could include:

• Your savings: changes to your money, savings or investments.
• Your income: changes to your earnings or other income.
• Your home: moving to a new address.
• Your household: a partner, child or lodger moving in or out.
• Extra payments: gifts, refunds or compensation that could affect your benefits.
• Holidays abroad: you may need to tell the DWP if you leave England, Scotland or Wales, even for a holiday.

The rules vary depending on your benefit and circumstances. If you're unsure whether you need to report something, check the relevant guidance or ask the DWP.

What if you forget to report a change?

If you don't report a change you're required to report, you could receive more money than you're entitled to.

The DWP may then ask you to repay the overpayment. In some cases, you could also face a fine or prosecution.

If you think you've forgotten to report something, don't panic. Check what you need to do and contact the DWP to explain your circumstances.

When will the checks start?

The new measures are being introduced gradually, with full implementation expected by 2029/2030.

The DWP published guidance on 13 October explaining how the checks will work and what happens if a claim needs further investigation.

If you claim universal credit, ESA or pension credit, it's understandable to have questions about what these new powers mean for you.

But a bank account check doesn’t automatically mean you've done anything wrong or that your benefits will stop.

The best thing you can do is keep your details up to date, report changes when you're required to and respond promptly if the DWP contacts you.

And if you're worried about your own circumstances, don't assume the worst. Check the rules for your benefit and seek advice if you need help understanding what they mean for you.