Labour ‘abandons plan to snoop on welfare claimants’ bank accounts to block them from fraudulently claiming benefits’

Ministers have reportedly dropped plans to check Universal Credit applicants’ savings through a system that depended on their consent, changing how the Department for Work and Pensions intends to identify ineligible claims. The shift matters because the Government had expected the original proposal to reduce benefit overpayments, while critics say abandoning it weakens efforts to curb welfare spending.

The previous plan, announced by Rachel Reeves, was estimated to save £200 million a year by addressing some of the £1 billion in Universal Credit overpayments linked to incorrect declarations. Claimants are generally ineligible if they have more than £16,000 in money, savings and investments. The DWP says it will instead introduce an Eligibility Verification Measure requiring banks and financial institutions to share information on accounts meeting specified criteria, which it expects to save £1.2 billion by 2030-31; the article reports the change as a decision by John Healey.