We get lots of clients asking us “how long should I keep old paperwork for?” – So we thought we would provide some guidance!
What do I need to keep for a lifetime? And what can go straight in the shredder?
A good rule of thumb to consider when you are deciding what to keep is to think about how hard that document is to replace.
Important documents such as birth and marriage certificates, copies of Wills, any policy documents, share certificates, mortgage papers should always be kept. These should be in a ‘permanent file’.
Then things like household bills and bank and investment statements should be kept for at least two years, and insurance documents as long as they are valid (home insurance etc). Thereafter these can be shredded.
For tax related paperwork (like payslips, P60, P45s) HMRC suggests keeping them for at least 22 months from the end of the tax year they relate to. So, as the tax year finishes on April 5, you should keep your relevant paperwork until at least January 31 two years later.
If you complete a tax return each year – you should keep your records for at least 15 months after this is submitted.
Even if you don’t normally complete a tax return you should hang on to any documents relating to capital gains or losses for around two years after the end of the tax year they relate to, as this will aid calculation of capital gains and losses.
If you are self-employed, you must keep your records for at least five years after the 31 January submission deadline of the relevant tax year. HMRC may decide to check your records to make sure you are paying the right amount of tax.
One way to minimise financial clutter is to eliminate paperwork and do all of it (or at least some) online.
Banks and Investment companies will be willing for you to ‘go paperless’ – and it’s usually possible to have your household bills managed in this way too – if you choose.
Some people find that this means they miss things, or are not clear what’s what. Remember, you can always request copies of anything you require again in the future or can save a copy from the online system or email to your computer.
If your computer fails, all of these documents will be available again in hard copy from your provider, as they will have a copy.
As an extra safeguard, Magenta has a personal client Log In area, where we can upload and store important documents for future reference, so that you and we can access these whenever required.
To register to use this service, send us an email and we can arrange for you to be sent more details: firstname.lastname@example.org