The Department for Work and Pensions (DWP) is set to implement new measures to combat benefit fraud by being able to request data from pensioner bank accounts.
The upcoming Public Authorities (Fraud, Error and Recovery) Bill will grant the Government authority to retrieve funds directly from the bank accounts of individuals found guilty of benefit fraud.
Under the new legislation, banks will have the obligation to report any suspicious transactions, and the DWP will have the ability to ask for bank statements of those under investigation. However, direct access to bank accounts will not be granted.
Expected to take effect from April 2026, the Bill will extend its reach to include individuals claiming Pension Credit, as reported by the Telegraph.
Recent statistics reveal that in February 2025, approximately 1.36 million pensioners were receiving Pension Credit. In April 2025, overpayments of Pension Credit amounted to £610 million, with £270 million attributed to fraud.
The crackdown on benefit fraud is part of the government’s broader strategy to save £9.6 billion over the next five years. Last year, an estimated £7.4 billion was lost to benefit fraud.
A spokesperson from the DWP emphasized that human judgment will always be involved in decisions affecting benefit entitlement in cases of fraud and error. The Fraud, Error and Recovery Bill is designed with principles of fairness, proportionality, and includes various safeguards and independent oversight.
The Bill is estimated to save £1.5 billion over the next five years and contribute to an overall saving of £9.6 billion by 2030, according to OBR estimates.
Additional provisions in the Bill include empowering DWP crime investigators to apply for search warrants to seize evidence like computers and smartphones from fraudsters. Moreover, the time limit for civil claims related to Covid fraud will be extended from six to twelve years. Currently, the DWP provides benefits to nearly 24 million individuals.
DWP minister Liz Kendall expressed concerns in March about the social security system, stating that it is failing those it intends to support and hindering progress in the country. She highlighted alarming statistics indicating significant reliance on sickness or disability benefits among working-age individuals and a concerning number of young people not engaged in education, employment, or training.