The Department for Work and Pensions (DWP) is set to gain the authority to access pensioner bank account information to combat benefit fraud through new legislative measures. The upcoming Public Authorities (Fraud, Error, and Recovery) Bill will empower the government to retrieve funds directly from the bank accounts of individuals involved in benefit fraud.
Under the new bill, banks will be mandated to report any suspicious transactions, and the DWP will have the ability to request bank statements from individuals under investigation, although direct access to bank accounts will not be granted. The legislation, anticipated to be effective from April 2026 pending House of Lords approval this month, will extend to Pension Credit claimants, as reported by the Telegraph.
Recent statistics reveal that as of February 2025, approximately 1.36 million pensioners were receiving Pension Credit. Notably, in April 2025, an overpayment of £610 million in Pension Credit was recorded, with £270 million attributed to fraudulent activities.
This crackdown is part of the government’s broader strategy to save £9.6 billion over the next five years, with an estimated £7.4 billion lost to benefit fraud in the previous year. A DWP spokesperson emphasized the importance of human decision-making in cases of fraud and error, ensuring fairness and proportionality in benefit entitlement adjustments.
Furthermore, the Fraud, Error, and Recovery Bill includes provisions for DWP crime investigators to seek search warrants to seize evidence, such as computers and smartphones, from fraudsters. Additionally, the bill proposes extending the time limit for civil claims related to Covid fraud from six to twelve years. The DWP, responsible for providing benefits to nearly 24 million individuals, aims to achieve significant savings through these measures.
In a statement from March, DWP minister Liz Kendall highlighted the challenges within the social security system, pointing out concerning trends such as a high number of individuals on sickness or disability benefits, youth unemployment, and the increasing demand for Personal Independence Payments, particularly among young people and those with mental health conditions.