Digital Identity in the UK: Will 2025 Be the Year of the Government-Backed Wallet?

The UK government once pinned its hopes on GOV.UK Verify; a £200 million identity verification platform designed to give citizens seamless access to online services. But despite the investment, the system failed to gain traction and was eventually decommissioned. Now, in the wake of that collapse, the UK is taking a fresh approach, potentially making 2025 a pivotal year in the evolution of UK digital identity.

The urgency is clear. Public sector fraud in the UK is estimated to cost taxpayers over £3 billion annually, while citizens remain frustrated by the patchwork of logins, security questions, and paper-based verification still required across government services. As digital expectations rise, there's increasing demand for secure, user-friendly authentication methods that put people; not bureaucracy; in control.

This new wave of innovation centres on a government-backed digital identity wallet, enabled by biometrics, decentralised architecture, and user consent. Could this wallet finally succeed where previous attempts failed?

1. GOV.UK Verify: Why It Failed and What’s Next
2. Inside the Government Digital Wallet: Tech and Use Cases
3. Trust, Privacy, and Inclusion: The Roadblocks Ahead
4. Global Lessons: What the UK Can Learn from Abroad
5. GOV.UK Wallet: A New Phase Begins

GOV.UK Verify: Why It Failed and What’s Next

When GOV.UK Verify launched in 2016, the vision was ambitious: a single login that allowed UK residents to access services across departments using verified credentials from certified private companies. Yet by 2023, the project was officially retired.

Low adoption rates plagued Verify from the start. Fewer than 10 government services fully integrated with the platform, and even those that did often reported poor user experience and low engagement. Citizens found the verification process confusing, especially if they lacked conventional forms of ID like passports or driving licences. Major departments such as HMRC eventually opted out, citing reliability issues and cost concerns.

In response, the government pivoted to a new model rooted in updated standards, broader collaboration, and modularity. The Department for Science, Innovation and Technology (DSIT) and formerly the Department for Digital, Culture, Media and Sport (DCMS) introduced the Digital Identity and Attributes Trust Framework (DIATF) in 2024. This framework lays out governance, technical, and interoperability standards designed to align the UK’s approach with international models, particularly the EU’s EUDI Wallet initiative¹.

The government has also taken a more pragmatic stance, welcoming public-private partnerships. Companies like Yoti and the Post Office, which already operate identity apps used by millions, are being brought into the fold to deliver real-world solutions in tandem with central government infrastructure².

Inside the Government Digital Wallet: Tech and Use Cases

The government's new approach centres on the GOV.UK Wallet, a digital wallet that enables citizens to securely store, manage, and present their credentials. Unlike its predecessor, this wallet is user-centric, modular, and designed with reusability and privacy in mind.

Biometric authentication forms the foundation of the system. Users can verify their identity using facial recognition or fingerprint scanning directly from their smartphones. The wallet performs real-time checks against trusted data sources, such as passport or DVLA records, while ensuring biometric data never leaves the user’s device unless explicitly permitted. Some applications even support voice recognition, offering greater accessibility for users with physical disabilities³.

Another innovation is the wallet’s use of self-sovereign identity (SSI) principles. Rather than relying on centralised databases, the system allows users to store cryptographically signed credentials issued by government departments. These credentials; such as proof of age, benefit status, or right to reside; can be presented selectively and securely. For example, a user needing to prove they are over 18 could present just that attribute, rather than an entire document containing their name and address⁴.

This new wallet architecture is already being piloted in real government services. The Department for Work and Pensions (DWP) is testing digital proofs of benefit entitlements, allowing claimants to access services like council tax discounts without presenting physical documents⁵. Similarly, the NHS is exploring replacing NHS Login with wallet-based access, improving authentication flows for medical records and prescription services.

The Driver and Vehicle Licensing Agency (DVLA) is also preparing digital driving license credentials for future rollout. These could be used for age checks, airport security, or roadside verification; all without needing a plastic card. 

Trust, Privacy, and Inclusion: The Roadblocks Ahead

While the technology underpinning the GOV.UK Wallet is impressive, public trust will determine its success. There are legitimate fears about how the system might be used; or misused.

Privacy advocates warn that systems based on biometrics and government-issued digital credentials could lead to surveillance creep. The UK government has attempted to address this by embedding privacy-by-design principles. For instance, the wallet allows for selective disclosure of credentials and stores data locally on users' devices. Biometric data is encrypted and never shared without explicit consent. There is also no central repository tracking users' interactions with services¹.

Another key concern is exclusion. The elderly, low-income individuals, and people with limited digital access are at risk of being left behind. Unlike Estonia, where digital identity is introduced from birth, the UK must bridge significant digital literacy gaps across diverse populations. Ensuring services still offer offline or assisted alternatives will be essential.

GDS has emphasized that the GOV.UK Wallet will not be mandatory and will remain one option among several for accessing services. However, without proactive efforts to reach underserved groups, there’s a real risk the wallet becomes a tool of convenience for the digital-savvy, rather than a universal right.

Global Lessons: What the UK Can Learn from Abroad

The UK is not the first country to venture into digital identity territory, and there are valuable lessons to be drawn from both successes and failures around the world.

Estonia is widely considered the global leader in digital identity infrastructure. Its national e-ID system allows citizens to vote online, access healthcare, and sign legal documents digitally. Importantly, the system is underpinned by X-Road, a secure data exchange layer that decentralises control and prevents any single authority from aggregating personal data. Estonia’s success underscores the importance of not just issuing credentials, but building the infrastructure to support secure, transparent data sharing⁶.

In Canada, digital identity is being pursued through a federated model, where provinces maintain autonomy over identity data but follow national standards for interoperability. The Pan-Canadian Trust Framework has enabled private sector collaboration without sacrificing public trust. Canada’s experience highlights the value of decentralisation and public-private cooperation; both of which are now being adopted in the UK model⁷.

On the other hand, India’s Aadhaar system offers a cautionary tale. While it has enabled millions to access public services efficiently, Aadhaar has also faced significant scrutiny over privacy, centralisation, and data breaches. The lack of user control and the mandatory nature of Aadhaar have led to high-profile legal challenges and social backlash. The UK would be wise to avoid similar pitfalls by ensuring that its wallet remains voluntary, consent-based, and transparent in its design⁸.

The European Union’s upcoming EUDI Wallet offers yet another reference point. This wallet will allow EU citizens to authenticate themselves across borders and access services using credentials they control. Built on strong encryption and aligned legal frameworks, it exemplifies the benefits of cross-border standardisation. For the UK, aligning with EUDI principles; even post-Brexit; could unlock future interoperability, especially in travel and finance.

GOV.UK Wallet: A New Phase Begins

Momentum is already building. In May 2024, the GOV.UK Wallet officially became available to public sector bodies, marking the beginning of its phased rollout. Built by the Government Digital Service (GDS), the wallet is already being tested in real-world applications like proving age and address during service sign-ups or product purchases⁹.

Unlike the one-size-fits-all approach of GOV.UK Verify, the wallet is designed to be modular, interoperable, and user-controlled. GDS has described it as “a step change” in the way the UK government handles digital identity, and one that reflects global best practices in both technology and ethics¹⁰.

The wallet is being released under a “public beta” model, allowing departments to integrate its functionality while users begin to adopt it organically. Feedback from these early implementations will shape broader deployment throughout 2025 and beyond.

2025 could finally mark the arrival of a unified digital identity system for the UK; one that works for everyone, not just the tech-savvy.

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🎟️ Register your place at DigiGov Expo and get a firsthand look at the future of UK digital identity. 

1. GOV.UK. “GOV.UK Wallet: Building momentum & working in partnership.” Government Digital Service, May 14, 2024. https://gds.blog.gov.uk/2025/05/14/gov-uk-wallet-building-momentum-working-in-partnership 
2. Computer Weekly. “GOV.UK Wallet open to public sector bodies.” May 2024. https://www.computerweekly.com/news/366624844/Govuk-Wallet-open-to-public-sector-bodies 
3. Yoti. “Yoti Digital ID.” https://www.yoti.com/business/digital-id/
4. World Economic Forum. “A Blueprint for Digital Identity.” https://www.weforum.org/reports/a-blueprint-for-digital-identity
5. Civil Service World. “GOV.UK Wallet goes live.” May 2024. https://www.civilserviceworld.com/news/article/govuk-wallet-goes-live 
6. e-Estonia. “X-Road data exchange.” https://e-estonia.com/solutions/interoperability-services/x-road/ 
7. Digital ID & Authentication Council of Canada (DIACC). “Pan-Canadian Trust Framework.” https://diacc.ca/pctf/ 
8. The Economic Times. “Aadhaar: History, Controversies, and Benefits.” https://economictimes.indiatimes.com/topic/aadhaar
9. GOV.UK. “GOV.UK Wallet goes live.” Government Digital Service, May 2024. https://www.gov.uk/wallet 
10. GDS Blog. “GOV.UK Wallet: Building momentum.” https://gds.blog.gov.uk/2025/05/14/gov-uk-wallet-building-momentum-working-in-partnership