The Department for Work and Pensions (DWP) has issued a formal response to consumer champion Martin Lewis after he raised an urgent alarm about significant barriers preventing millions of Universal Credit claimants from switching their bank accounts.
Martin Lewis Sounds the Alarm
In a direct letter to the Pensions Secretary, the founder of MoneySavingExpert.com demanded the government "Stop people on Universal Credit being blocked from switching bank." Mr Lewis warned that a cumbersome bureaucratic process is effectively locking up to 8.3 million people receiving Universal Credit out of accessing better financial deals and accounts.
He argued this situation is detrimental to competition, consumers, and the wider economy, stressing that claimants should be able to improve their financial situation without any cost to the government. The issue came to light after numerous MoneySavers contacted his website detailing their struggles.
The Problematic Process for Claimants
Mr Lewis outlined a series of core issues creating what he described as an unnecessary barrier. A major hurdle is that many claimants are reportedly told they must attend an in-person appointment at a Jobcentre to update their bank details. This requirement adds hassle, travel costs, and for the many UC recipients in work, potential loss of income.
Furthermore, the Universal Credit system appears not to have been fully updated to accommodate modern digital banks, some of which do not provide physical cards or printed statements. This makes verification for the DWP cumbersome and outdated.
This stands in stark contrast to the Current Account Switch Service (CASS), a government-backed initiative designed to be a speedy, seamless, and secure process with built-in fraud checks. The UC administrative rules are seen to "pervert the ease of the process" without clear cause.
DWP's Initial Response and the Path Forward
In its response on 16th December 2025, a DWP spokesperson stated: "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 added that personal banking details must be handled securely to ensure payments reach the correct person and to protect claimants from fraud or impersonation.
Martin Lewis has urged the government to swiftly investigate the scale of the problem, which only official data can fully reveal, and to fix the wider issue. He provided a detailed briefing with case studies and expressed a willingness to meet and discuss solutions, highlighting that many affected individuals have found the process so stressful they have abandoned switching altogether.
