DWP to start ‘monitoring’ bank accounts in 2026 to combat benefit fraud

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The Department for Work and Pensions is set to introduce new fraud-combatting measures – here’s what you need to know

Linda Howard Money and Consumer Writer and Lauren Haughey Lifestyle and Money Reporter
A person using an ATM, or cash machine to withdraw cash bank notes.

The DWP has released 11 new factsheets providing further insight into the safe implementation and monitoring of these measures(Image: Yau Ming Low via Getty Images)

This year, the UK Government announced what it calls ‘the biggest fraud crackdown in a generation’, aiming to significantly reduce the misuse of funds within the welfare system. The Department for Work and Pensions (DWP) believes that the new Public Authorities (Fraud, Error and Recovery) Bill will be instrumental in saving taxpayers a hefty £1.5 billion over the coming five years.

The bill introduces tough penalties, including driving bans of up to two years for persistent benefit fraudsters, as well as granting the DWP powers to directly seize funds from the bank accounts of those guilty of fraud. Additionally, the Eligibility Verification system will allow third parties, such as banks, to highlight suspicious benefit claims.

The DWP has published 11 new factsheets to clarify how these measures will be safely implemented and monitored. These documents outline that the UK Government plans to start implementing the proposed measures in 2026.

The factsheets also elaborate on the checks and balances, including reporting requirements and oversight mechanisms, designed to ensure that the new powers are used in a manner that is ‘appropriate, proportionate, and effective’. According to the Daily Record, advice from GOV.UK states: “The Government will begin implementing the Bill measures from 2026.

“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. 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 DWP will also gain the ability to gather data from additional third-party organisations, such as airlines, to confirm whether people are claiming benefits from abroad, potentially violating eligibility rules.

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