From 2026, the Division for Work and Pensions (DWP) can be stepping up its efforts to crack down on profit fraud, and that features checking information from financial institution accounts.
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Naturally, this has sparked concern. Are they going to begin spying on how folks spend their cash?
Will tens of millions of advantages claimants come beneath the highlight? Not fairly. Right here’s what’s altering, and what it means in case you declare issues like Common Credit score, Pension Credit score or Employment and Help Allowance.
What’s altering in 2026?
The federal government is introducing new powers by the Public Authorities (Fraud, Error and Restoration) Invoice. They are saying it’s all a part of “the most important fraud crackdown in a era,” aiming to cease organised crime gangs and people who’re intentionally claiming cash they’re not entitled to.
As a part of this, the DWP will work with banks and different organisations to flag potential breaches of profit guidelines.
For instance, if somebody has greater than £16,000 in financial savings however continues to be receiving Common Credit score, that might increase a pink flag.
However – and that is necessary – they received’t be capable to see the way you spend your cash. Nobody goes by your on-line procuring or takeaway orders.
So… can the DWP see my checking account?
No, they received’t have direct entry to your account. And so they can’t see your transactions.
Banks will solely share restricted info if somebody’s account exhibits indicators they may not be eligible for means-tested advantages.
The DWP says this might embody issues like unusually excessive balances, however they’ll solely be capable to see what’s wanted to boost a priority, not the entire image.
Moreover, there are strict guidelines in place to make sure that folks’s information isn’t overshared. Banks may face penalties in the event that they cross on extra info than allowed.
What occurs in case your account is flagged?
If one thing appears off, the DWP could look into your state of affairs extra intently. That doesn’t imply you’re responsible of something – and so they’ve made it clear that nobody can be handled like a legal simply because their financial institution sends over some information.
The concept is to catch main fraud and cease profit overpayments earlier than they occur, to not trouble on a regular basis people who find themselves merely making an attempt to get by.
Different modifications coming with the brand new regulation
The brand new Invoice additionally provides the DWP extra instruments to stop fraud and get better cash that has been wrongly claimed. This contains:
- The facility to grab funds straight from financial institution accounts in confirmed fraud circumstances
- Driving bans of as much as 2 years for repeat profit fraudsters
- New rights to test journey information to see if individuals are claiming advantages whereas residing overseas
- Additional powers to get better money owed from people who find themselves not claiming advantages however owe cash
Much more significantly, the DWP may now perform search and seizure operations, significantly when legal gangs are concerned in large-scale fraud.
All of this comes with guarantees of sturdy safeguards, skilled employees, and impartial checks to verify powers aren’t misused.
Will this have an effect on everybody on advantages?
Should you’re claiming advantages pretty and sticking to the foundations, this isn’t one thing to fret about.
This isn’t about snooping – it’s about stopping large-scale fraud. The DWP has introduced that it’s going to undertake a ‘check and be taught’ strategy, collaborating with banks and reviewing the system’s performance earlier than rolling it out totally.
It’s additionally value noting that these modifications don’t begin till 2026. That provides time for extra particulars to emerge and for programs to be completely examined.
Last ideas
It’s truthful to be cautious when the federal government broadcasts it’ll be working with banks to inspect profit claimants. Nevertheless it’s not as excessive as it’d sound. Nobody is scrolling by your procuring historical past.
The goal is to cease the extreme abuse of the system, to not penalise people who find themselves genuinely struggling and doing all the pieces proper.
To remain on the protected aspect, guarantee your financial savings and revenue particulars are updated in your Common Credit score or different profit accounts, and notify any modifications as quickly as they happen.
Ricky Willis is the unique Skint Dad. A money-making fanatic, father, and husband to Naomi. He’s at all times on the lookout for distinctive methods to earn a bit further.
