UK DWP to gain new bank‑monitoring and debt‑recovery powers from October 2026

The Department for Work and Pensions (DWP) will introduce new “last resort” debt‑recovery powers in October 2026. Under the PAFER Act the department can recover unpaid benefit debts directly from claimants’ bank accounts and, in severe cases, seek a court order to temporarily suspend a driving licence. The powers apply to Universal Credit, Pension Credit and Employment and Support Allowance.

A separate Eligibility Verification Measure will allow banks to provide limited information to the DWP, such as account holder details and whether savings exceed the £16,000 capital limit for Universal Credit, or evidence of prolonged overseas activity. Banks are prohibited from sharing transaction histories or special‑category data. The DWP stresses that the data will not be used to make automatic entitlement decisions and will be reviewed alongside other evidence.

Labour Work and Pensions Minister Andrew Western said the measures target “those who deliberately dodge their debts”, while Cabinet Office Minister Satvir Kaur said they will protect taxpayers and frontline services. The DWP estimates benefit fraud and error cost £9.6 billion in the 2025/26 financial year and will pilot the scheme with a small number of banks before wider rollout.