The new powers apply initially to three types of benefits and pensions where incorrect payments are currently highest, while the State Pension is explicitly excluded from these checks and cannot be added via regulations. Under the EVM, banks and other financial institutions are required to examine data on accounts receiving specified DWP benefits and match them against eligibility indicators set by the department. For example, for Universal Credit, an individual generally cannot hold more than £16,000 in savings to remain eligible, unless specific exceptions apply. The DWP stated that this power can only be used to obtain information on accounts receiving a specified benefit and linked accounts that match these eligibility criteria.
DWP officials emphasize that the measures include safeguards to protect personal information, with a statutory code of practice dictating how the powers may be used. A DWP minister confirmed that the information shared will not be based on a presumption or suspicion of guilt. The department noted that banks face penalties for oversharing data, such as detailed transaction information, and are limited to providing data that matches the specific criteria outlined in the Eligibility Verification Notice. The government argues that this approach replaces previous “Open Banking” proposals, which relied on claimant consent and could not be applied to every Universal Credit claim, offering instead a more consistent method for identifying incorrect payments.
The implementation is currently in a “controlled test-and-learn phase,” allowing the DWP to assess systems, data quality, and operational impacts before scaling up. The government projects the measure will save taxpayers £1.2 billion over the next five years, a figure supported by officials who describe it as a vital step in correcting inaccurate payments and preventing avoidable debt. However, the policy shift has drawn criticism; some observers, including independent commentators, have described the powers as akin to “bank spying,” arguing that flagged individuals retain rights that must be respected. The DWP maintains that the focus is on both fraud and error, aiming to ensure those entitled to support receive it while protecting public funds.
Political reactions have been mixed, with the current administration framing the EVM as a necessary tool to close loopholes in Universal Credit, such as those involving individuals detained for hospital treatment whose living costs are met by the NHS. The department has indicated that other benefits could be added to the scheme in the future, subject to parliamentary approval through affirmative regulations. As the test phase proceeds, the DWP will monitor customer outcomes and the efficacy of the data-matching process before considering broader application across other benefit categories.
