Banks will be forced to scrutinise millions of accounts from April 2026 in a comprehensive crackdown aimed at exposing benefits cheats. The Department for Work and Pensions (DWP) has confirmed the start date for powers it is describing as “the biggest fraud crackdown in a generation”.

The new framework, established under the Public Authorities (Fraud, Error and Recovery) Bill, will enable banks to highlight accounts that appear to violate benefit regulations, such as maintaining more than the £16,000 savings threshold for Universal Credit. Officials will not view detailed transactions, but will receive notifications if accounts trigger concerns.

The DWP maintains the programme will preserve taxpayers £1.5 billion over five years following losses from benefits fraud and error reaching a record £7.4 billion last year.

A fact sheet issued by ministers said: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”

It maintained the department will not possess direct access to people’s bank details but banks will be required to forward alerts.

Simultaneously, the legislation grants the Government robust new powers to reclaim money from fraudsters, including seizing funds directly from bank accounts and, in instances of persistent refusal to repay, prohibiting offenders from driving for up to two years. The measures were revealed as Labour’s Work and Pensions Secretary Liz Kendall launched a scathing attack on the existing system.

She declared: “The social security system that we inherited from the Conservatives is failing the very people that it is supposed to help and is holding our country back.

“The facts speak for themselves. One in 10 people of working age are now claiming a sickness or disability benefit. Almost one million young people are not in education, employment or training – one in eight of all our young people.”

However, critics have raised concerns that the proposals risk introducing “mass financial surveillance” of claimants and could unfairly penalise vulnerable households.

Whilst the DWP maintains the emphasis is on targeting fraudsters who cost honest taxpayers billions, campaigners contend the changes represent a worrying shift towards banks operating as monitors over personal finances.

Silkie Carlo, director of Big Brother Watch, declared: “These powers are a disaster for financial privacy and the presumption of innocence… This is a completely unprecedented regime of intrusive generalised financial surveillance across the population.”