Universal Credit System Blocks Millions From Switching Banks, Martin Lewis Warns
Table of Contents
Millions of individuals receiving Universal Credit (UC) are facing significant hurdles when attempting to switch bank accounts, potentially missing out on financial benefits and hindering competition within the banking sector.
Up to 8.3 million people on Universal Credit may be effectively prevented from taking advantage of better banking deals, incentives, and accounts, according to a letter sent to the Secretary of State for Work and Pensions on December 12, 2025, from Martin Lewis, founder and chair of MoneySavingExpert.com. The issue, Lewis argues, is detrimental to both consumers and the broader economy.
Bureaucratic Barriers to Banking
The core of the problem lies in the complex requirements imposed on UC recipients who wish to change banks. Lewis’s letter details how some – and potentially many – are being told they must schedule an in-person appointment at a Jobcentre to facilitate the switch. This requirement introduces significant friction, adding both hassle and cost for individuals, particularly those already in employment while receiving UC.
“This adds hassle, cost and, for the millions on UC who are in work, possible loss of income,” Lewis wrote, “never mind additional impact on those with accessibility issues.” He further noted the potential for inefficient use of Jobcentre resources.
The current process directly contradicts the intended simplicity of one-click bank switching facilitated by the Current Account Switch Service (CASS), a government-supported system designed to be speedy, seamless, and secure. CASS already incorporates robust fraud checks, yet the UC system appears to circumvent this established process.
Digital Banking Disconnect
Further complicating matters is the UC system’s apparent lack of adaptation to the rise of digital banks. Many newer financial institutions operate without traditional physical cards or printed statements, creating additional obstacles for UC recipients navigating the bureaucratic requirements. The system, as it stands, is described as “cumbersome” and ill-equipped to handle modern banking practices.
Lewis revealed he was prompted to investigate the issue after receiving a growing number of complaints from consumers. A call for feedback on his social media channels confirmed the widespread nature of the problem. “Many described the process as stressful, inconvenient and unnecessary,” he stated. “Some gave up and stuck with their existing account. A number have told me they will never attempt to switch banks again.”
Call for Government Investigation
Lewis is urging swift government action to investigate the extent of the problem and implement necessary fixes. He emphasized that official data collection, a task only the government can undertake, is crucial to understanding the true scale of the issue.
“I suspect this is an issue that hasn’t been raised with you before, and you will be as keen as I am to look to investigate how widespread the problem is,” Lewis wrote. He has attached a detailed briefing from his team at MoneySavingExpert, including case studies and analysis of why the issue may have gone unnoticed until now, and offered to meet to discuss the matter further.
The letter underscores a critical need for the Universal Credit system to align with modern banking practices and ensure equitable access to financial services for all recipients.
