What it means for youBenefits & entitlements
Banks will now flag some benefit accounts to the DWP. What it means if you get Universal Credit or Pension Credit
The DWP has sent its first notice asking banks to flag accounts that may break savings or time-abroad rules. Banks will not share your spending, and a flag is not an accusation.
Published 27 October 2026Last checked 27 October 2026England, Scotland, WalesFrom Department for Work and Pensions
Illustration generated with AI
What's happening
On 26 October 2026 the Department for Work and Pensions (DWP) issued its first Eligibility Verification Notice. It asks banks to look at accounts that receive Universal Credit, Pension Credit or Employment and Support Allowance and flag ones that may hold more savings than the rules allow, or suggest long spells abroad. Banks do not send your transactions or spending, a flag is not a finding of fraud, and no benefit decision can be made on the bank's flag alone.
The question: What do the new DWP bank checks look at, who do they affect, and what can claimants do to stay within the rules?
The policy
- Announced by
- Department for Work and Pensions
- Announced on
- 26 October 2026
- Stage
- in force
- Takes effect
- First notice issued 26 October 2026, starting with a test-and-learn phase
- Universal Credit claimant with £5,000 saved: Well under the £16,000 limit. Nothing changes as long as savings and circumstances are reported correctly.
- Pension Credit claimant with £14,000 saved, already reported: Already counted correctly, so no change. The DWP treats £8 a week as income from savings.
£14,000 minus £10,000 is £4,000. £4,000 divided by £500 is 8, so £8 a week (illustrative calc).
- Universal Credit claimant who spent six weeks abroad without telling their work coach: Could be flagged and asked about the trip. Universal Credit usually continues for one month abroad only if you tell your work coach first.
This applies to you if…
- You get Universal Credit, Pension Credit or Employment and Support Allowance paid into a bank or building society account
- You have savings near the limits for your benefit, such as £16,000 for Universal Credit
- You sometimes spend long periods outside the UK
Not for you if…
- People who only get the State Pension, Child Benefit, Personal Independence Payment or other benefits not named in the notice
- Accounts held outside the UK, credit cards and business accounts, which are outside the scheme
What it's worth
DWP says undeclared savings and time abroad in Universal Credit and Pension Credit cost an estimated £1.5 billion in 2025 to 2026, and expects the checks to save £1.2 billion by 2030 to 2031.
Tax year 2026 to 2027 rules
Illustrative calc: how savings over £10,000 affect Pension Credit
- Pension Credit ignores the first £10,000 of savings and investments.
- Every £500 over £10,000 counts as £1 of weekly income.
- With £14,000 saved, £4,000 is over the limit.
- £4,000 divided by £500 is 8, so £8 a week counts as income.
- That lowers the weekly Pension Credit award by up to £8, or about £416 a year.
About £8 a week counted as income
Illustrative calc using the GOV.UK Pension Credit savings rule. Actual awards depend on full circumstances.
How to do it
- 1
Check the savings rules for your benefit
Universal Credit needs you to have £16,000 or less in money, savings and investments. Pension Credit ignores the first £10,000 and counts £1 a week of income for each £500 above that.
Takes about 10 minutes
- 2
Universal Credit can usually continue for one month abroad if you tell your work coach before you go. Pension Credit can continue for up to 4 weeks away from Great Britain if you tell the Pension Service.
Takes about 10 minutes
- 3
Report any change straight away
Report changes to savings, investments or property, and plans to go abroad for any length of time. For Universal Credit use your online account or the helpline. For Pension Credit call the Pension Service or write.
Takes about 15 minutes
- 4
Read the safeguards if you want the detail
The Code of Practice sets out what banks may check and what they may not share.
Deadline
Ongoing
The checks start with a test-and-learn phase under independent oversight, before any wider rollout.
The catches
Linked accounts can be in scope
The checks cover accounts that receive one of the three benefits and linked accounts. Current, savings and investment accounts can all be included.
Not reporting can cost you
GOV.UK says your claim might be stopped or reduced if you do not report a change straight away, and you might have to pay a £50 penalty.
A flag can lead to questions
A flag is not proof of anything, but the DWP may look into it further. Keeping records of where savings came from, and of travel dates, can make this simpler.
Watch for scams
News of bank checks can be used by scammers. If you get an unexpected call, text or email about your benefits, contact the DWP using the numbers on GOV.UK rather than any number in the message.
Illustrative example
A couple with an inheritance
Tom and Jess get Universal Credit. Jess inherits £18,000 from an aunt and it is paid into their joint savings account, which is linked to the account their Universal Credit goes into.
- Their savings are now over the £16,000 Universal Credit limit.
- If they report it straight away, the DWP can stop or adjust the award from the right date and any overpayment stays small.
- If they do not, the account could be flagged under the new checks, and any overpayment built up could have to be paid back, possibly with a £50 penalty.
Reporting the inheritance promptly keeps any repayment as small as possible.
Illustrative example. Names and details are made up. Real outcomes depend on full circumstances.
What this means for…
- Get benefits: If you get Universal Credit or Employment and Support Allowance, the account your benefit goes into, and linked accounts, can be checked.
- State Pension age or over: If you get Pension Credit, savings over £10,000 and long trips abroad are what the checks look for. The State Pension on its own is not in scope.
- Saver: Savings in current, savings and investment accounts linked to a benefit account can count.
Common misreadings
You might hear: The DWP can now see everything in my bank account.
Actually: The DWP says the powers do not give it access to accounts, transactions or spending. Banks only check accounts against set eligibility rules and flag possible matches.
You might hear: If I am flagged, my benefits will be stopped.
Actually: The DWP says a flag does not mean fraud or wrongdoing and no decision about entitlement can be made on the bank's information alone.
You might hear: This applies to all benefits, including the State Pension.
Actually: Only Universal Credit, Pension Credit and Employment and Support Allowance are in scope.
Where the UK nations differ
- England, Scotland and Wales
- The DWP runs Universal Credit, Pension Credit and Employment and Support Allowance, so the checks apply here.
- Northern Ireland
- These benefits are run separately in Northern Ireland. The DWP announcement does not say the checks cover Northern Ireland claims.
What you could do
have had a change in savings, an inheritance or a big payment
Report it now through your Universal Credit account or the Pension Service.
are planning a trip abroad
are worried about an overpayment or debt
Get free help from Citizens Advice or MoneyHelper before you reply to the DWP.
Timeline
26 October 2026
First notice to banks
DWP issues its first Eligibility Verification Notice under the Public Authorities (Fraud, Error and Recovery) Act 2025.
The detail
The rules
- Notices can only relate to Universal Credit, Pension Credit and Employment and Support Allowance.
- The Code of Practice says banks may be asked to return details of Universal Credit accounts holding more than £16,000, the upper capital limit.
- The DWP may lower that figure to look at capital between £6,000 and £16,000, where Universal Credit is reduced.
- Banks send account and holder details and how the account meets the indicators. Transaction information is not shared.
- An Eligibility Verification Notice cannot be used to ask about named claimants.
- Accounts held outside the UK, credit cards and non-personal accounts are excluded.
References
- Public Authorities (Fraud, Error and Recovery) Act 2025: Gives the DWP the power to issue Eligibility Verification Notices.
- Code of Practice, paragraphs 3.4 to 3.6: Sets out the savings and time-abroad indicators banks may check.
Words explained
- Eligibility Verification Notice
- A formal request from the DWP asking banks to check benefit accounts against set rules.
- Capital
- Money, savings and investments that count when working out some benefits.
- Overpayment
- Benefit paid to you that you were not entitled to, which you usually have to pay back.
- Linked account
- Another account connected to the one your benefit is paid into, such as a savings account with the same bank.
In short
Banks will now flag some Universal Credit, Pension Credit and ESA accounts that may hold too much in savings or show long trips abroad. They don't share your spending, and a flag isn't an accusation. Report changes in savings or travel plans straight away to avoid paying money back later.
Related dates
- 1 Nov Cold Weather Payment period startsChange · in 5 days
Sources
- Government unleashes £1.2 billion crackdown as part of anti-fraud drive, Department for Work and Pensions (2026-10-26)
- Code of Practice on Eligibility Verification Notices, Department for Work and Pensions
- Universal Credit: eligibility, GOV.UK
- Pension Credit: eligibility, GOV.UK
- Report benefit changes of circumstances, GOV.UK
- Universal Credit if you go abroad, GOV.UK
- Public Authorities (Fraud, Error and Recovery) Act 2025, UK Parliament
This is guidance, not regulated financial advice. Check figures against the linked official source before you act. Written with AI assistance and checked against primary sources. How Kitty works. For free, impartial help, try MoneyHelper or Citizens Advice.