The Department for Work and Pensions (DWP) is set to utilize pensioner bank account data to combat benefit fraud with the implementation of new measures. The forthcoming Public Authorities (Fraud, Error and Recovery) Bill will empower the Government to recover funds directly from the bank accounts of individuals involved in benefit fraud.
Under the new legislation, banks will be mandated to report any suspicious activities, and the DWP will have the authority to request bank statements of individuals under investigation, though direct access to bank accounts will not be granted. The Bill, slated for review in the House of Lords this month and expected to be enforced from April 2026, will encompass those receiving Pension Credit, as per the Telegraph.
Recent data reveals that in February 2025, around 1.36 million pensioners were receiving Pension Credit. Notably, in April 2025, overpayments of Pension Credit amounted to £610 million, with fraudulent activities contributing £270 million to this sum.
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. The DWP emphasized that decisions impacting benefit entitlement in cases of fraud and error will always involve human intervention, ensuring fairness and proportionality. The Bill is projected to generate savings of £1.5 billion by 2030, aligned with Office for Budget Responsibility (OBR) estimates.
Additionally, the Bill includes provisions for DWP crime investigators to seek search warrants to seize evidence, such as computers and smartphones, from fraudsters. Moreover, the time limit for civil claims related to Covid fraud will be extended from six to twelve years. The DWP serves benefits to nearly 24 million individuals.
DWP minister Liz Kendall highlighted concerns in March, stating that the current social security system is failing those it intends to support, citing statistics showcasing challenges faced by various demographics. She emphasized the need for reform to address these issues effectively.