The government has begun using new powers that require banks to share information about some benefit claimants, according to the Department for Work and Pensions. The first Eligibility Verification Notice has been issued under the Public Authorities (Fraud, Error and Recovery) Act 2025.
Key points
- First notice issued — banks must now share data on certain benefit claimants when asked.
- £1.2 billion target — the measure is expected to save taxpayers that sum by 2030/31.
- Scope — it covers Universal Credit, Pension Credit and Employment and Support Allowance.
- Safeguards — a flag alone is not proof of fraud and no decision can rest on it alone.
The measure is aimed at two of the main sources of fraud and error: undeclared savings and claimants who remain overseas longer than the rules permit. Banks will be asked to check relevant accounts against eligibility rules and flag cases where further investigation may be needed. Ministers say the powers do not give the department access to bank accounts, transactions or spending habits.
A flag does not mean fraud has occurred, and no benefit decision can be made on this information alone. The scheme will start with a test-and-learn phase under independent oversight before any wider rollout. It forms part of a wider plan to save £14.6 billion over five years, alongside debt recovery and information-gathering powers in the same Act.
Minister for Innovation, Fraud and Debt Lilian Greenwood said: "Benefit fraudsters should be looking over their shoulder." She added that banks would simply be asked to identify whether somebody may no longer meet the rules for the benefits they receive. Fraud and error linked to undeclared savings and time spent abroad in Universal Credit and Pension Credit is estimated to have cost £1.5 billion in 2025-26 alone.
What it means in practice
For most people on Universal Credit, Pension Credit or Employment and Support Allowance, nothing changes day to day: no one will be asked to explain their shopping or spending. But if your circumstances have changed — savings have grown, or you have been abroad longer than the rules allow — it is worth telling the department promptly rather than waiting to be flagged, because overpayments can build up and later have to be repaid.
- Check your details — report changes in savings or time spent abroad as soon as they happen.
- A flag is not an accusation — it triggers a check, not a decision on your claim.
- Watch for contact — respond to any request for information from the department rather than ignoring it.
