The Department for Work and Pensions (DWP) is set to gain new powers to check the bank accounts of benefits claimants, in a move that has sparked major concerns about privacy and government overreach.
Under the proposed new rules, the DWP would be able to monitor financial activity more closely in an effort to tackle fraud and stop benefit overpayments — but critics say it’s an intrusive step too far.
What’s Changing Under the New Law?
Currently, the DWP can only request details of someone’s bank transactions if they have reasonable grounds to suspect fraud. But a new bill could change that entirely.
- The Data Protection and Digital Information Bill is currently being debated in the House of Lords.
- If passed, it would allow the DWP to compel banks to hand over data about claimants without suspicion of wrongdoing.
- The report stage of the bill begins on October 15, and if approved, the law could come into effect from 2026.
This means that anyone receiving means-tested benefits — like Universal Credit, Pension Credit, or Housing Benefit — could have their financial activity monitored by the government.
How Will Bank Account Checks Work?
The DWP says that it will not be snooping into everyone’s daily transactions. Instead:
- Banks will be asked to flag accounts that show signs someone may no longer be eligible for benefits.
- Only limited information will be shared unless a red flag is triggered.
- If flagged, the DWP could then carry out a closer investigation.
Financial expert blog Skint Dad explained:
“If something seems off, the DWP may look into your situation more closely. That doesn’t mean you’re guilty – they’re trying to stop overpayments before they happen.”
