The Department for Work and Pensions (DWP) has started using new powers to ask banks to flag accounts that may not meet benefit rules.
The first official notice was issued on Monday 26 October 2026, with checks focusing on savings and time spent abroad.
The changes could affect people claiming Universal Credit, Pension Credit and New Style Employment and Support Allowance (ESA).
But there’s an important point to make straight away. Having your account flagged doesn’t mean you’ve done anything wrong, and your benefits won’t automatically be stopped.
The checks are starting with a small number of banks and other financial providers before being introduced more widely.
Which benefits are included in the new checks?
The new checks cover three benefits:
- Universal Credit
- Pension Credit
- New Style Employment and Support Allowance (ESA)
The State Pension and Personal Independence Payment (PIP) aren’t included in these checks.
However, if you receive PIP alongside Universal Credit, for example, your bank account could still be checked because you claim Universal Credit.
The rules apply to England, Scotland and Wales.
How will the bank account checks work?
The DWP sends banks a set of rules to check against their records.
Banks then look at accounts receiving the relevant benefit payments, along with certain other accounts held by the same people.
If something matches one of the rules, the bank shares limited information with DWP so it can decide whether anything needs checking.
For example, this could involve savings that appear to be above the amount allowed for a benefit, or information that suggests someone may have been abroad for longer than the rules permit.
But a bank balance doesn’t always tell the full story.
Some money, such as certain compensation payments, may not count towards benefit savings limits. And using your bank card abroad doesn’t automatically mean you’ve broken the rules about travelling.
That’s why DWP must look at the circumstances rather than simply relying on information flagged by a bank.
What information can banks share with DWP?
Under these new powers, banks can share certain details, including:
- Names of account holders
- Account numbers and sort codes
- Balances held in relevant accounts
- Details of linked and joint accounts
- Dates of transactions made abroad
But they cannot use these checks to hand over full bank statements, details of what you’ve bought or the exact locations of transactions.
DWP also cannot log into your online banking or see what you’re spending in real time.
That means it isn’t receiving a list of your supermarket shopping, takeaway orders or everyday purchases through these checks.
The limits are explained in the official DWP guidance on bank account checks.
How much savings can you have while claiming benefits?
This is where the rules can get confusing, because the three benefits don’t all work in the same way.
Universal Credit: If you have £6,000 or less in savings, this normally won’t affect your payment.
Savings above £6,000 can reduce what you receive, while having more than £16,000 usually means you won’t qualify. Some types of money are treated differently, and special rules can apply to people moved from tax credits.
Pension Credit: The first £10,000 in savings won’t affect your entitlement. Above that, DWP treats every £500, or part of £500, as £1 of extra weekly income when working out your payment.
There’s no automatic £16,000 savings cut-off.
New Style ESA: Your savings don’t affect how much New Style ESA you receive. However, other rules, including those about time spent abroad, can still affect your entitlement.
You can check the full rules on Universal Credit savings, Pension Credit and New Style ESA.
What happens if your bank account is flagged?
First, DWP will review the information alongside what it already knows about your claim.
It might find that everything is correct and decide no further action is needed.
If something needs explaining, DWP may contact you through your Universal Credit journal. If you don’t have an online account, it could contact you by letter, phone or text.
You may be asked questions or to provide documents that help explain your circumstances.
Although banks cannot share full statements under these new checks, DWP may ask you to provide statements or other evidence as part of a follow-up review.
Importantly, a member of DWP staff must make any decision about your benefits. A bank flag on its own isn’t enough.
Skint Dad says:
It’s reasonable for DWP to check that benefits are being paid correctly. Nobody wants money going to people who aren’t entitled to it.
But it’s just as important that people are treated fairly when something gets flagged.
A bank balance doesn’t tell someone’s full financial story. There could be a perfectly valid reason for money being in an account, and the benefit rules aren’t always straightforward.
What matters is that people get a fair chance to explain their circumstances before decisions are made about money they may rely on to pay their bills.
Do you need to do anything now?
If your benefit details are correct and DWP hasn’t contacted you, there’s nothing extra you need to do because these checks have started.
If you’re unsure what benefits you might be entitled to, we’ve also explained how to check your entitlement using a free benefits calculator.
However, there are a few things worth knowing.
1. Make sure you’ve reported any changes
If your savings, income or circumstances have changed, make sure you’ve told the right benefit office.
This can include receiving a lump sum, such as an inheritance or compensation payment, or planning to travel abroad.
For Universal Credit, you can sign into your account and use the ‘Report a change of circumstances’ option.
For Pension Credit, contact the Pension Service. For New Style ESA, contact Jobcentre Plus.
You can find the correct details on the government’s report a change of circumstances page.
2. Don’t ignore a message from DWP
If DWP asks you to provide information, respond as soon as possible.
Check what they’re asking for and provide the relevant details. This might include documents explaining where money came from or evidence of travel dates.
If you’re unsure whether a phone call or text is genuine, contact DWP using the number on GOV.UK or through your normal benefit account.
DWP warns that failing to respond to a request for information could lead to your payments being delayed or stopped.
3. Challenge a decision if you think it’s wrong
If DWP changes your benefits and you disagree, you can usually ask for a mandatory reconsideration.
This means asking DWP to look at the decision again. It’s free, and you normally need to request it within one month.
You can read how to challenge a benefit decision on GOV.UK.
These new checks are also separate from the DWP’s powers to recover unpaid benefit debts from bank accounts.
Having your account flagged under the eligibility checks doesn’t automatically mean money can be taken from it.
