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The Department for Work and Pensions (DWP) has officially announced a renewed commitment to fight benefit fraud and overpayments, which totaled a staggering £9.5 billion in the year leading up to April 2025.
As part of a major policy push, new bank account checks will now play a vital role in identifying and reducing fraudulent claims across welfare programs.
Fraud and Error Breakdown
According to the latest report from DWP:
- Total overpayments: £9.5 billion (down from £9.7 billion in the previous year)
- Fraud-related overpayments: £6.5 billion
- Universal Credit fraud: Decreased from £5.62 billion to £5.2 billion
- Universal Credit overpayments due to fraud or error: £6.35 billion (down from £6.4 billion)
Most of these discrepancies were traced back to failure to report income, not declaring partners, and hidden savings or assets.
What’s Changing – How Bank Checks Will Work
To tackle these issues, the DWP will implement routine bank account checks to detect:
- Undeclared income
- Unreported savings above £6,000
- Assets exceeding the £16,000 cap
- Failure to disclose joint claims
These checks will be made possible under the Eligibility Verification Measure, part of the Public Authorities (Fraud, Error and Recovery) Bill, which is currently progressing through the House of Lords.
Impact and Projected Savings
DWP Minister for Transformation, Andrew Western, stated that the department aims to “robustly tackle fraud” and protect taxpayers’ money.
He emphasized that benefit fraud is often targeted by organized crime groups and opportunistic individuals alike.
Projected Benefits and Commitments
| Initiative | Projected Savings | Implementation Timeline |
|---|---|---|
| Public Authorities (Fraud, Error and Recovery) Bill | £1.5 billion | Next 5 years |
| Verify Earnings & Pension Service expansion | N/A (supports wider fraud detection) | Ongoing |
| Autumn Budget & Spring Statement commitments | £9.6 billion | Through 2029/30 |
Addressing Underpayments Too
While overpayments remain a key concern, the DWP is also addressing underpayments, which rose from £180 million to £390 million in the last year.
These are often due to errors in calculating Universal Credit components, such as:
- Caring responsibilities
- Disability-related additions
- Children’s support elements
About 2% of UC claims are underpaid due to incomplete information from claimants.
Why This Matters
This crackdown is not just about saving money—it’s about ensuring fairness in the welfare system.
With nearly 24 million people receiving welfare benefits, making sure that only eligible individuals are paid the right amount helps maintain public trust and fiscal responsibility.
Western reiterated the government’s commitment to ensuring that “the right people are paid the right amount at the right time.”
The DWP’s latest push to clamp down on £9.5 billion in benefit fraud and errors through bank checks and enhanced verification is a clear step toward protecting public funds and reinforcing the integrity of the UK’s welfare system.
With savings limits, income verification, and new legislation taking center stage, claimants are encouraged to fully disclose their financial situations to avoid penalties, delays, or loss of entitlements.
The initiative aims not only to reduce fraud but also to ensure that those most in need receive the right support at the right time.
FAQs
What is the DWP doing to combat benefit fraud?
The DWP is introducing bank account checks, expanding verification systems, and leveraging data from HMRC to identify fraud related to savings, income, and undeclared partnerships.
Who will be affected by the new DWP bank checks?
Anyone claiming means-tested benefits like Universal Credit or Pension Credit may be subject to checks, especially those with high savings or inconsistent income reporting.
Can I lose benefits if I have more than £6,000 in savings?
Yes. If you have more than £6,000, your payments may be reduced. If your savings exceed £16,000, you may not be eligible for Universal Credit at all.