Money is still one of the subjects that causes us the most stress and your financial record keeping can go a long way to either making the problem better or worse.  

Are you the sort of person that never likes to throw anything away? Well when it comes to financial paperwork there is a tendency to hold on to it so we can check our budgets, pay our bills, taxes and ensure we can claim refunds should things go wrong.

Going over the top on your record keeping and storing more paperwork than you need will not only take up more physical space in your home, by seeing the paperwork, it will make money a constant thought in your mind.

Being physically organised can help your mind become clutter free.

Financial record keeping rules and best practice

Payslips, P45 and tax returns

  • The official rules from HM Revenue and Customs (HMRC) state that you should keep your documents for 22 months after the end of the tax year they relate to.
  • If you know you are likely to be investigated by HMRC it’s a good idea to keep records for longer.
  • If you run your own company then you will need to ensure your record keeping extends to 5 years after the 31st January following the end of the tax year (basically 6 years).
  • It’s always a good idea to keep copies of receipts and expenses for the year you will be completing your tax return for.

Bank and investment statements

  • Unless required for tax purposes, it’s a good idea to keep statements for at least 2 years.
  • Ideally you should maintain records forever but you can do this online. I’ll explain more about this later.

Insurance documents

  • You only really need to keep insurance documents for as long as they are valid.
  • Once the policy has ended you are no longer insured so won’t be able to make a claim from that particular policy.   

Official documents

  • Things like your birth certificate, marriage certificate, Will, Lasting Powers of Attorney and mortgage documents should all be kept in paper format indefinitely in a secure safe.

Getting your financial record keeping organised

Whilst HMRC have official rules on how long things should be kept, ideally it’s a good idea for your record keeping to go back forever. One reason for this is when making claims for compensation. When it comes to financial products and advice there usually is no deadline for making complaints.

This does not mean you need to keep all your record keeping needs to be in paper format though. Far from it. It is now really easy to scan and store your information online.

Here are my 5 tips to get your record keeping organised:

    1. How easy is it to replace the document? If difficult, keep a paper copy.
    2. Scan every document either using a scanner or your mobile phone. There are some great scanning apps that link to online file storage accounts.
    3. Use a large reputable online cloud account like Google or Microsoft. If you already have a Gmail or Outlook email address you will probably find you already have quite a bit of free storage space online with them. You may also want to invest in a portable hard drive so that you can make backup copies of your data on a regular basis. Just in case your online storage provider goes bust!
    4. Have a proper online filing structure in place so you can easily find documents in the future. It’s a good idea to group your documents by subject e.g. Banking, taxes, insurance etc. Then save them in date order. An app like Evernote can even scan through document text which makes it even easier to find the document you want.
    5. Change your billing methods and bank/investment statement production to ‘online only’. This will avoid the need for you having to scan documents (you can drag them into your own online storage account) and you will probably save money on your bills as many companies now charge for paper statements.

At RTS Financial Planning we like to make the first part of our client journey together the ‘getting organised’ stage. We have lots of tools and advice that can help get your record keeping in order and reduce any stress or anxiety you may feel seeing all that paperwork! If you would like to find out more then please give us a call and organise a consultation at our expense.

Risk warning:

Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.