Overview

• The Department for Work and Pensions (DWP) has confirmed plans to examine bank transactions to verify Universal Credit claims starting in 2026.
• New powers will allow banks to flag potential benefit fraud cases, with the DWP reviewing flagged accounts for unreported income or changes in circumstances.
• MPs have raised concerns about privacy violations and the potential for 10,000 innocent individuals to be wrongly flagged due to algorithmic errors.
• The DWP has emphasized safeguards, independent oversight, and a phased 'test and learn' implementation approach to ensure fairness and proportionality.
• The government anticipates saving £1.5 billion over five years by modernizing fraud detection and recovery processes across the public sector.