The DWP will be able to check some benefit recipients’ accounts under new fraud powers, but one group is explicitly exempt.
The Department for Work and Pensions (DWP) has confirmed that recipients of the State Pension will be exempt from new bank-account checks introduced under forthcoming fraud legislation. The confirmation comes as the Public Authorities (Fraud, Error and Recovery) Bill, a flagship anti-fraud measure, nears royal assent.
Under the new law, which begins implementation from April 2026 with a “test and learn” phase, the DWP will be empowered to issue Eligibility Verification Notices to banks. These notices instruct banks to verify whether accounts receiving certain means-tested benefits meet specific eligibility criteria, such as maximum savings thresholds.
State pensioners are exempt (Image: Getty)
However, the DWP has made clear that it will not have full access to people’s bank accounts under the new regime, Wales Online reported.
According to its own factsheet, the department will receive only “limited information” from banks and will not see transactional data, such as how a claimant spends their money.
Moreover, state pension payments are explicitly excluded from these powers, and banks cannot be asked to provide data on pensioner accounts.
The Bill is also designed with several safeguards to protect individuals’ data and rights.
These include independent oversight, a statutory code of practice for banks, and a requirement that a human being must always be involved in any decisions that could affect someone’s benefit entitlement.
In addition to verification powers, the legislation also gives the DWP stronger tools to recover overpaid benefits.
Where direct recovery is justified, the department will be able to make deductions from bank accounts, but only after efforts to agree a voluntary repayment plan have failed.
Critics, including privacy campaigners and some MPs, have raised concerns about the potential scale of the checks.
Former Tory minister David Davis tweeted: “The bank account spying powers in today’s Public Authorities (Fraud, Error and Recovery) Bill amount to a suspicionless surveillance tool impacting over 9 million innocent people’s bank accounts. The Government must think again.”
Still, DWP ministers argue the reforms are necessary.
The department points to the growing cost of fraud and error in the benefit system, with £9.7 billion of overpayments recorded in 2023–24.
They insist that the new measures strike a balance by improving fraud detection while protecting individuals’ privacy and ensuring human oversight.
