DWP: new Department for Work and Pensions powers explained - can it check your bank account and balance?
The major shake-uphas prompted questions about privacy, safeguards and trust 🔍
- The DWP has been given new legal powers to request information from banks and recover some overpayments
- These powers are targeted at suspected fraud and incorrect benefit payments, not routine checks on everyone
- But a parliamentary watchdog has warned the powers must be used carefully to maintain public trust
- Ordinary claimants who report changes correctly should not be affected under the new rules
- MPs are calling for greater transparency over how often the DWP uses these powers and with what impact
The Department for Work and Pensions (DWP) has been given major new powers to request information from banks and, in some cases, recover money directly from people’s accounts.
Unsurprisingly, that has raised a big question for millions: can the DWP now see what’s in your bank account?
The short answer is no, not routinely. But the longer answer comes with important caveats.
And now, a parliamentary watchdog has warned that how these powers are used will be crucial to maintaining public trust. Here is everything you need to know about it.
What new powers does the DWP have?
The changes come from the Public Authorities (Fraud, Error and Recovery) Act 2025, which gives the DWP stronger tools to tackle benefit fraud and incorrect payments.
Under the Act, the DWP can compel banks and financial institutions to provide information to help verify whether someone is eligible for benefits, and request data from third parties as part of criminal investigations into suspected fraud.
In some cases, the DWP will also be able to recover money owed directly from a person’s bank account without going to court.
These are significant powers, and the Public Accounts Committee (PAC), a group of MPs that scrutinises government spending, has stressed they must be used proportionately.
Can the DWP access anyone’s bank account?
No. The DWP does not have the power to casually browse bank accounts or monitor everyone’s finances under the new rules.
The powers are designed to be targeted, not universal, and are intended to check eligibility where there is reason to believe someone may be receiving the wrong amount, investigate suspected fraud, and help recover confirmed overpayments.
Ordinary people who are claiming correctly, reporting changes when required, and not under investigation should not suddenly find the DWP peering into their bank balance.
That said, the PAC has warned that the DWP has not yet clearly explained how often it will use these powers, or what safeguards will be in place, which is why transparency is such a big issue.
A DWP spokesperson said: “We have introduced major reforms to ensure people are paid the correct benefits, to recover overpayments and to help save billions of pounds for the taxpayer.
“The powers in the Fraud, Error and Recovery Act have numerous safeguards and will be independently overseen.
“We will not have access to claimants’ bank accounts when checking they are receiving the correct benefits.”
What are the new powers designed to do?
The Government says the aim is to reduce fraud, error and incorrect payments, which remain stubbornly high.
Underpayments, where people miss out on money they are entitled to remain a big problem.
Unclaimed or “unfulfilled” eligibility was estimated at £3.7 billion in 2024–25, particularly affecting disability benefits like Personal Independence Payment (PIP), when people don’t report worsening conditions.
The PAC says that better data-sharing could help prevent mistakes in both directions, stopping fraud and ensuring people get what they’re owed.
Should ordinary people be worried?
For most people, no immediate action is needed. The new powers are not about mass surveillance, and they don’t give the DWP free access to everyone’s finances.
But the PAC has made it clear that public confidence depends on clear limits on how the powers are used, strong safeguards against over-reach, and openness about how often banks are contacted and money is recovered.
The committee has called on the DWP to publish regular updates in its annual accounts showing how frequently these powers are used and what impact they have.
The PAC’s chair Sir Geoffrey Clifton-Brown said these powers allow the DWP to “reach further into citizens’ lives”, and if they are wrongly implemented, the consequences for individuals could be serious.