Here’s when DWP is set to start checking people’s bank accounts and why

A new 'souped-up' fraud bill is currently in the final stages of the House of Lords.

Labour's new Fraud, Error, and Recovery Bill is currently in the final stages of the House of Lords. The UK Government have said that the fraud bill aims to "recover stolen cash and impose driving bans on those who repeatedly fail to pay back taxpayer money".

The "souped-up powers" from the Department for Work and Pensions (DWP) would allow it to recover money "directly from the bank accounts of fraudsters who can repay but are wilfully gaming the system in order not to."

"The Bill will also give powers to the DWP to get data from banks and other financial institutions to help verify the eligibility of those who receive certain benefits to make sure they are getting the correct payments," the UK Government said in April 2025.

"This will help to stop people falling further into debt because of incorrect payments and help the DWP spot fraudulent claims."

👁️The Government's mass bank spying powers "risk recreating a horizon-scale scandal for some of the most marginalised members of our society" - Jasleen Chaggar

Along with ten other rights groups, we've urged the Government to stop bank spying.

Read⤵️https://t.co/EBNA1cUEVS pic.twitter.com/JSkNPanWhO

— Big Brother Watch (@BigBrotherWatch) October 16, 2025

The UK Government also said in April that the bill is "set to save £1.5 billion over the next five years", adding: "An additional new measure will see the time limit for civil claims against Covid fraud doubled from six to twelve years.

"This step change in the ability to fight fraud committed during the pandemic will give the Covid Corruption Commissioner and the Public Sector Fraud Authority more time to investigate complex cases and apply their new powers retrospectively - including the ability to raid properties and retrieve money from Covid fraudsters’ bank accounts. "

The UK Government plans to begin implementing the bill measures from 2026, with several reports stating this could happen as early as April next year.

Controversy

Several organisations, including Big Brother Watch (BBW) and Disability Rights UK, have slammed the proposals, citing privacy concerns and fears that the wrong people could be targeted.

In a statement in January 2025 about the Fraud Error and Recovery Bill, BBW said: “We all want genuine fraudsters to face the law, especially the multi-millionaire tax avoiders and Covid scammers.

“But these extreme powers are not only about fraud but about correcting the government’s own frequent payment errors.

“We must be extremely cautious about the government creating a second-tier justice system reserved for people who rely on welfare that side-steps fair hearings in courts to take away people’s funds and freedoms.

“The public and parliament will rightly be very sceptical about empowering the government to go directly into anyone’s bank accounts to take our money and even our driving licenses, least not to target the elderly, disabled and people on the poverty line whose lives could be destroyed by mistaken punishments.

“This is not quite ‘the biggest fraud crackdown in a generation’, but one of the biggest assaults on the welfare system in a generation. It’s part of a wider plan that is turning British welfare into a digital surveillance system, with the government also introducing mass bank spying of the population under the same Bill, on the premise of constantly investigating benefit claimants.

“These are totally unprecedented privacy intrusions and punishments that will do more damage to fundamental British values of fairness and justice than to the serious fraudsters.”

🚨NEWS🚨

We are warning against the Government's bank spying bill, which will bring surveillance onto Disabled people already living in fear of the DWP.

Read more👇https://t.co/Eq3n6CLYqA

— Disability Rights UK (@DisRightsUK) October 16, 2025

Disability Rights UK also said this week: "We are warning against the Government's bank spying bill, which will bring surveillance onto disabled people already living in fear of the DWP."

In April 2025, the UK Government said that "protections are central to the bill".

It said: "No personal information will be shared by DWP to support financial institutions in the identification of these accounts, and DWP will not have access to people’s bank accounts in verifying eligibility and will not be able to see where people are spending their money.   

"Protections are central to the Bill, making sure there is proportionate and effective use of the powers, and that DWP is protecting vulnerable customers.

"For example, people will only be disqualified from driving as a last resort when they don’t rely on their car for work or for caring responsibilities and where they continually avoid repayment.

"Staff will be trained to the highest standards on the appropriate use of new powers, and we will introduce new oversight and reporting mechanisms. 

"On top of the Bill measures, the Chancellor announced in the Spring Statement a further commitment to recruit over 500 additional DWP fraud and error staff who will make better use of government data to correct errors in benefit claims, as well as increasing checks on potential Universal Credit claimants by introducing more ways to verify the amount of savings they hold, as well as their earnings and expenses."

Members of the House of Lords began their further examination of the Public Authorities (Fraud, Error and Recovery) Bill, in the report stage on Wednesday (15 October).

A second day of report stage is scheduled for Tuesday, 21 October.

On Wednesday, members voted to a change that would allow the UK Government to investigate cases of fraud without prior invitation from a public authority.