The UK government is strengthening its efforts to prevent welfare fraud and reduce incorrect benefit payments through a new financial verification system introduced by the Department for Work and Pensions (DWP). The updated arrangements will require selected banks and financial institutions to examine account information to help establish whether certain benefit recipients continue to satisfy eligibility requirements.
The initiative, known as the Eligibility Verification Measure (EVM), was established under the Public Authorities (Fraud, Error and Recovery) Act 2025. Its implementation began with the first Eligibility Verification Notice issued on October 26, 2026, marking the start of a controlled testing programme involving financial institutions.
The new verification arrangements cover recipients of Universal Credit, Pension Credit and New Style Employment and Support Allowance. They are primarily intended to identify financial circumstances that could affect benefit entitlement, including savings exceeding permitted limits and extended stays outside the UK where residency conditions apply.
Under the revised framework, banks will be responsible for checking their own records against specific indicators supplied by the DWP. These indicators are designed to highlight accounts that may contain information relevant to a claimant’s eligibility. The department will not receive unrestricted access to customers’ banking activities.
One of the main areas of attention is the amount of money held by benefit recipients. Universal Credit generally has a capital threshold of £16,000, meaning claimants whose qualifying savings and other capital exceed this amount are normally unable to receive the benefit. Pension Credit also has financial eligibility conditions, alongside rules governing residency and overseas absences.
When a financial institution identifies an account matching the specified criteria, it may provide selected details to the DWP. The information can include account holders’ names, account numbers, sort codes, relevant balances, linked account details and dates of overseas transactions.
However, the new system does not give the department permission to examine every financial transaction made by a claimant. Complete bank statements, everyday purchase records and ordinary spending histories are excluded from the information-sharing arrangements. Banks are also not required to provide direct access to customers’ online banking services.
The measures may also involve certain joint and connected accounts. Where accounts are linked to a qualifying benefit recipient, financial institutions may identify relevant information about those arrangements. Nevertheless, this does not mean that every account belonging to a family member or another person will automatically become subject to investigation.
The appearance of a potential eligibility concern does not necessarily indicate that a claimant has deliberately provided false information. A flagged account simply allows the department to identify cases where additional checks may be appropriate. Officials must examine the available evidence and consider the individual’s circumstances before making decisions about benefit entitlement.
Where further clarification is needed, claimants could receive communication through their Universal Credit online accounts, telephone calls, letters or text messages. The department may request additional information or supporting documents to determine whether payments have been made correctly. Any decision to revise or discontinue benefits must follow the relevant assessment procedures.
The government estimates that the new verification arrangements could help recover or prevent approximately £1.2 billion in losses by the 2030-31 financial year. Officials believe stronger financial checks will improve the accuracy of welfare payments and help ensure that government assistance is directed towards people who meet the required conditions.
Despite the expected financial benefits, the changes have generated questions about individual privacy and the handling of confidential banking information. To address these concerns, the legislation establishes restrictions on the type of information that can be shared, alongside safeguards and independent oversight of the system.
The initial rollout will follow a testing approach, allowing the department to assess how effectively banks identify relevant information and whether the process produces accurate results. Its impact on benefit recipients will also be considered before any wider implementation.
The introduction of these financial checks marks an important development in the administration of Britain’s welfare system. While the government maintains that the objective is to reduce fraud and payment errors, the measures also place greater emphasis on verifying financial eligibility. Claimants who disagree with decisions made following an assessment will retain the right to challenge the outcome through the established review and appeal procedures.
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