Banks to Monitor Accounts Amid Major Fraud Crackdown on Benefit Cheats

In April 2026, a new measure will require banks to closely examine millions of accounts as part of a substantial effort by the Department for Work and Pensions (DWP) to uncover individuals committing benefit fraud. This initiative, labeled "the biggest fraud crackdown in a generation", stems from the Public Authorities (Fraud, Error and Recovery) Bill, which will allow banks to identify accounts potentially violating benefit regulations—specifically those exceeding the £16,000 savings limit for Universal Credit. Although officials will not examine individual transactions, they will receive alerts when accounts raise red flags.

The DWP claims that this program aims to save taxpayers £1.5 billion over the next five years, as benefits fraud and error have reached a staggering £7.4 billion in losses last year. According to the fact sheet issued by government officials, any information shared through the Eligibility Verification Measure will not imply that individuals are presumed guilty of any wrongdoing. Banks will be responsible for sending alerts to the DWP without giving the department direct access to personal bank details.

Moreover, the new legislation will provide the government with enhanced authority to recover funds from fraudsters, including the ability to seize directly from bank accounts or, in severe cases of non-compliance, preventing offenders from driving for up to two years. The announcement of these measures has prompted criticism from Labour's Work and Pensions Secretary, Liz Kendall, who condemned the current system inherited from previous governments, describing it as failing those it is intended to assist. She pointed to the alarming statistics of benefit claimants, highlighting that one in ten working-age individuals are reliant on sickness or disability benefits and that a significant number of young people are disengaged from education and employment.

However, there are considerable concerns that these new measures could lead to what some critics refer to as "mass financial surveillance" of vulnerable claimants. Detractors argue that the proposals may unjustly penalize those in need and represent a disturbing shift toward banks monitoring personal finances. Silkie Carlo, director of Big Brother Watch, emphasized that these powers threaten financial privacy and challenge the principle of presumption of innocence, warning of an unprecedented level of intrusive financial oversight over the general population.