The Department for Work and Pensions (DWP) has issued a formal reply after being challenged by consumer champion Martin Lewis over a significant banking problem affecting millions of Universal Credit recipients.
Martin Lewis's Intervention on Behalf of Claimants
On Friday, December 12, the founder of MoneySavingExpert sent a letter to DWP Secretary of State Pat McFadden. In it, he argued that 8.3 million people claiming the benefit could be effectively blocked from switching their bank accounts. This prevents them from accessing competitive deals and cash incentives offered by banks to new customers.
Lewis also sent copies of his letter to UK Finance, the Building Societies Association, and the Current Account Switch Service (CASS) on Monday, December 15. He stressed that achieving "true inclusion" in the financial system means people must be able to choose and switch products with relative ease.
The Core Problem: Jobcentre Appointments and Security
Lewis identified a range of issues, but pinpointed a major bureaucratic hurdle. Many claimants are required to attend in-person appointments at their local Jobcentre to update their bank details. He stated this process adds unnecessary hassle, potential travel costs, risk of lost income from missed work, and is an inefficient use of government resources.
This requirement, he argued, perverts the ease of the process offered by the Current Account Switch Service, which has helped over 12 million people switch accounts seamlessly. For those on Universal Credit, the extra steps often make switching "not worth the time."
DWP's Response and Suggested Solutions
In its response, a DWP spokesperson said: "We thank MSE for their letter and will respond. DWP are committed to ensuring people receive the support they're entitled to, while creating a welfare system that is fair to the taxpayer."
The spokesperson emphasised that personal information such as bank details must be treated securely to ensure payments reach the correct person and to protect claimants from fraud or impersonation.
Martin Lewis proposed several solutions to the government to modernise the system, including:
- Implementing secure remote verification processes.
- Offering more flexible appointment times outside of standard working hours.
- Allowing access to digital banks where verification does not rely on possessing a physical bank card.
The full text of the letter sent to Pat McFadden is available on the MoneySavingExpert website.
