DWP to take money directly from personal bank accounts – here’s why | Personal Finance | Finance

The Department for Work and Pensions will be given new powers to take money directly out of people’s bank accounts. The new measures are being introduced to help clamp down on benefit fraud in the UK.

Liz Kendall, the Work and Pensions Secretary, says fraudsters’ tactics to avoid being caught are making it difficult for inspectors to hold them accountable.

Writing in The Telegraph, she said: “We’re in an absurd situation where DWP’s powers have not been updated for 20 years, meaning fraudsters have new ways of taking public money, and we need to keep pace with them.

“My team are still, in 2024, sending letters to gather evidence for those suspected of welfare fraud, slowing them down to snail’s pace when they could be shutting down serious fraud cases.”

This comes after benefit fraud racked up £7.3billion in costs for the public purse last year. The new crackdown aims to save the taxpayer £1.6billion over the next five years.

Chancellor Rachel Reeves is reportedly set for a significant budget this autumn with plans for tax hikes to try and stabilise public finances.

But the new ability for the Government to take money out of bank accounts directly has sparked concern among privacy campaigners.

Investigators will now be able to use these powers to recover debts from benefit fraudsters rather than having to take them to court.

Silkie Carlo, director of Big Brother Watch, said: “This blank cheque to force private companies to snoop and report on the country’s poorest citizens to the state is intrusive, excessive and will create a culture of fear among millions of people claiming benefits.

“For a Labour government to introduce tough investigatory powers more typical of a counter-terror context to Britain’s welfare system is an alarming attack on privacy and yet another assault on the poor.”

But Ms Kendall said: “We’re in an absurd situation where DWP’s powers have not been updated for 20 years, meaning fraudsters have new ways of taking public money, and we need to keep pace with them.”

She added: “We are taking bold steps to ensure this power is proportionate and targeted.”