The Department for Work and Pensions (DWP) is set to implement new measures to combat benefit fraud by requesting data from pensioner bank accounts. The upcoming Public Authorities (Fraud, Error and Recovery) Bill will grant the Government authority to recover funds directly from the bank accounts of individuals involved in benefit fraud.
Under the new legislation, banks will have to report any suspicious transactions, and the DWP will have the ability to ask for bank statements during investigations, without direct access to the accounts. The proposed Bill, scheduled to return to the House of Lords this month and anticipated to take effect from April 2026, will also cover individuals receiving Pension Credit, as reported by the Telegraph.
Recent statistics indicate that in February 2025, approximately 1.36 million pensioners were claiming Pension Credit, with overpayments reaching £610 million in April 2025, including £270 million attributed to fraud.
This crackdown is part of the Government’s broader strategy to save £9.6 billion over the next five years, following an estimated £7.4 billion loss to benefit fraud in the previous year. A DWP spokesperson emphasized that decisions affecting benefit entitlement in cases of fraud and error will involve human judgment, ensuring fairness and proportionality as outlined in the Fraud, Error and Recovery Bill.
The legislation also empowers DWP crime investigators to seek search warrants for evidence against fraudsters, such as seizing computers and smartphones. Moreover, the time limit for civil claims related to Covid fraud will be extended from six to twelve years. The DWP, responsible for providing benefits to nearly 24 million people, aims to save £1.5 billion over the next five years, contributing to an estimated total saving of £9.6 billion by 2030, according to OBR estimates.
Minister Liz Kendall from the DWP expressed concerns in March about the social security system’s shortcomings, highlighting issues such as high unemployment rates, a rising number of individuals claiming disability benefits, and the projected increase in Personal Independence Payments recipients. The DWP is committed to addressing these challenges and improving the effectiveness of the welfare system.
