**DWP Sets New Guidance on Bank Savings for Universal Credit Claimants as Fraud Crackdown Intensifies**
The Department for Work and Pensions (DWP) has announced plans to tighten checks on the savings of Universal Credit claimants, cautioning that those with more than £6,000 in their bank accounts could see their entitlement scrutinised and even reduced. The move is part of a wider push to tackle benefit fraud and ensure that public funds are distributed fairly in light of the ongoing cost-of-living pressures affecting millions of households across the UK.
Under current DWP guidelines, individuals or couples claiming Universal Credit must not have more than £16,000 in savings or investments. Falling below this threshold is essential for maintaining eligibility, as any amount above could disqualify a claimant from receiving the benefit altogether. For those whose savings fall between £6,000 and £16,000, payments are scaled down, reflecting the department’s belief that such funds could be reasonably drawn upon to support daily living.
The newly clarified policy outlines the mechanics of how savings impact Universal Credit. Claimants with savings exceeding £6,000 will see a gradual reduction in their payments, calculated as a deduction of £4.35 for every £250, or part of £250, above that level. So, for example, an individual with £6,500 in savings would have £6,000 disregarded with the remaining £500 treated as generating a notional monthly income of £8.70—ultimately reducing their benefit entitlement by that figure each month.
Government sources indicate that this formula extends to other income-related support schemes, such as Job Seekers Allowance and Employment and Support Allowance (ESA). For every £250 held above the £6,000 mark, claimants lose £1 per week from their payments. The same methodology is applied to income support and housing benefit, with benefits generally paid out on a fortnightly basis.
This development has emerged alongside recent confirmation from the DWP that bank account monitoring of claimants will become more commonplace. This means that those in receipt of benefits could find their accounts subject to checks, particularly where there is suspicion of undeclared savings or income. The government emphasises that such action is necessary to safeguard taxpayers’ money and prevent fraudulent claims.
Liz Kendall, Secretary of State for Work and Pensions, defended the changes by stating: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money,” adding that authorities will have new tools at their disposal to penalise fraud, including, in extreme cases, revoking driving licences. She also stressed that strict oversight procedures are in place to ensure the powers are used “proportionately and safely.”
Parliament is currently considering the Labour Party’s Fraud, Error and Debt Bill, which is set to grant the DWP enhanced authority to access and review bank accounts where benefit fraud is suspected. The new legislation, which has already passed its first reading in the House of Lords, includes powers to withhold or reclaim benefits, and even suspend driving licences for serious offenders. Some aspects of the draft bill have sparked debate, particularly with respect to privacy concerns and the risk of penalising legitimate claimants.
Officials maintain that the intent is to balance fairness with robust anti-fraud measures, implementing independent oversight and transparent reporting channels. For Universal Credit recipients, this means keeping a careful watch on the amount in savings and being prepared to answer queries from the DWP.
These changes come at a time when inflation and rising living costs make state support more vital than ever for many families. However, the government insists that accountability and strict adherence to eligibility rules are integral to maintaining the integrity of the welfare system.
As the new rules take shape and the bill moves through Parliament, claimants are advised to seek advice should they have any concerns about how their savings might affect their benefits. The DWP’s planned checks serve as a clear reminder: remaining within the prescribed savings limits is crucial to avoiding any unwelcome reductions in support.