The conventional wisdom is you only need to keep bank, credit card and other personal finance documents for six years. This is because HMRC (the taxman) can only ask you to go back that far if you’re being investigated for tax purposes.
However, I think the landscape has changed in recent years, and therefore everyone needs to take care about throwing things away (I shall ignore the “what if I’ve something to hide?” issue).
These state that private individuals (who don’t run a business) should keep their documents for 22 months after the end of the tax year to which they relate β or longer if you’re being investigated.
If you run a company, it’s five years after the 31 January following the end of the tax year β or roughly six years.
The reason you should keep them longer
The most common question I get on major mis-selling campaigns is “how far back can I claim?”. The answer is there’s no time limit. Yet the problem is gathering evidence for older claims. While you can demand financial institutions send you old documents for up to six years (see the guides linked above for how), beyond that it gets tricky.
The easiest way is to ensure you have the paperwork, as, this email I received recently, shows.
"Had a loan 22 years ago and used your reclaim PPI template to request a refund of this as I still had some of the paperwork, which I copied and sent with the claim. Needless to say, the first response was ‘can’t find any record of this loan’.
“I then wrote another letter spelling out the loan details, the account number it was paid into, etc. All of this was included on the copied paperwork already, but lo and behold my perseverance paid off!
“While I would have been delighted to have my PPI refunded, I was happily surprised to be offered a larger amount for the interest on the original amount. Thank you Martin Lewis.”
And don’t think this won’t be relevant in the digital age. You can’t assume the virtual documentation will be kept on financial institution’s servers any longer than they keep the files in the vaults.
Think carefully before chucking files
Evidence of systemic mis-selling often takes years to work through the system β if it’s related to a pension it could be many decades. So, it’s impossible now to say what you may need the paperwork for in a few years’ time. Therefore for safety, keeping old documents as long as you can β even for now-closed products β is a reasonable precaution.
You may also want to print out (or save electronically, see Cheap Memory Cards) any digital statements or applications. This is especially true if you’re switching products or closing one β for ease it’s worth copying your statements online while you’ve still got access to them.
If you’re trying to save space, it’s probably not necessary to keep everything once it hits its six-year birthday. Just the application and acceptance forms, and a couple of statements a year should be enough to give you at least some comfort.
Of course you could stretch this even further with such issues as Flight Delays Compensation now popping up, where you can go back to delays that happened in 2005. It goes to show that almost all documentation and notes you’d taken could be worth keeping, depending on the eventuality.