He shared a list of key documents you should keep
Martin Lewis has issued a stark warning about keeping your financial records in order. He warned his fans that failing to maintain the necessary paperwork could land you in serious trouble with HMRC.
A listener to his BBC podcast raised the issue as they sent in a question about digitising their documents. They wanted to know for which contracts and financial products they should keep an original paper copy for future reference. In his response, Mr Lewis began by outlining a general timeframe to bear in mind. He said: “The conventional wisdom is you only need to keep bank, credit card and other personal finance documents for six years, because HMRC – the tax office – is said to only be able to ask you to go back that far.”
‘There is nothing worse’
He went on to explain that you can be more relaxed in certain cases — but you may still want to err on the side of caution. The consumer expert said: “HMRC only requires tax records to be kept for most people doing self assessment for 22 months after the end of the tax year.
“Limited companies must generally keep accounting records for at least six years. But I would probably go for the six years anyway for safety just in case you have a tax investigation.”
He doubled down on the importance of having everything in order should HMRC come calling. Mr Lewis said: “There is nothing worse than a tax investigation. They have huge powers, it can be very distressing.”
HMRC holds sweeping authority to instruct businesses and other organisations to hand over information regarding their financial affairs, including details of their records and transactions. In individual cases, they can compel your bank to release information when deemed appropriate, or contact a person’s employer to obtain the details required.
Speaking more broadly about how long financial documents should be retained, Mr Lewis cited a blog post he had previously written on the subject.
‘Could be many decades’
He said previously: “Evidence of systemic mis-selling often takes years to work through the system. If it’s related to a pension, it could be many decades, so it’s impossible now to what you may need the paperwork of in a few years’ time.
“Therefore for safety, keeping all documents for as long as you can, even for now closed products, is a reasonable precaution.” Mr Lewis said that this principle had recently been proved to be worth its salt, given the ongoing car finance scandal and the forthcoming compensation scheme.
This relates to mis-sold car finance deals between April 6, 2007 and November 1, 2024. So if you arranged a deal during that period, you’d be glad to have held on to your paperwork if you want to file a complaint now.
The average typical compensation payout per claim is thought to be £83, though payments are unlikely to be made before at least 2027. Given the potential for a historical problem such as this, Mr Lewis had some clear advice. He said: “You don’t want to keeping a record of every payment you’ve ever made, but for most major transactions, products or services, I would want to keep my sign up documents, any upgrade documents and any closure documents, which detail what was paid, what wasn’t paid and what the terms were.”
List of key documents
He provided a list of the types of financial products you may wish to retain these essential documents for:
- Loans
- Credit cards
- Mortgages
- Car finance hire purchase
- Two bank statements for each year showing interest, fees and add-ons, including downloading key statements before switching or closing accounts, such as for package bank accounts or savings accounts
- Booking confirmations for flights or costly travel
- Other costly purchases, including any warranty or guarantees.
Mr Lewis concluded: “Anything that’s enough to prove what you had, is where I would go with this.”
