Should You Throw Away Old Bank Statements?

Almost everyone has stacks of old bank and credit card statements piled up in a cupboard or under the bed.  We never look at them, never use them and are never asked to show them to anyone – so is there really any need to keep them?  Would it be a wise way of tidying up the home to throw these seemingly useless bits of paper in the bin? 

Keep Bank Statements for Six Years

Most advice previously given has been to keep bank statements for six years.  Why six years?  Because, in HMRC tax investigations, this is the cut off point.  Anything that happened longer than six years ago they were unable to investigate.  Very few people have their taxes investigated though, and those whose main income is from work paid in the normal way, through PAYE, have very little chance of ever being investigated.

The only other reason to keep bank statements traditionally given in advice columns would be to prove income or address for applying for everything from a library card to a mortgage.  Registering with your local library, or many other services, typically requires you to show a bank statement or utility bill dating from the last three months.  Any older statements are useless for this purpose.  While getting a mortgage might require a year or two, at most three years, of bank statements.  Typically mortgage lenders won’t require this length, but for those with more complex income such as from contracting this might be asked for.

“Keeping our old bank statements in style”.  Banking Crisis by Comic Character Creations, on Flickr.  This work is licensed under a Creative Commons Attribution 3.0 Unported License.

Is it Safe to Throw Away Statements Older Than Three Years?

So is it safe to throw away statements older than three years?  Actually it’s probably a wise idea to keep them.  The recent scandals about mis-sold financial products look like they will only expand into more areas, and proving that you paid for a service you didn’t need might mean you’re entitled to a big cash payout.  Everyone knows about the PPI mis-selling scandal, but the latest suggestions are that packaged bank accounts could be next.

Don’t expect your bank to keep your financial records going this far back.  Especially if they were at fault they have a strong incentive to delete this old data to stop you claiming.  If you paid £15 a month for a packaged bank account for ten years and a full refund eventually becomes available, you’d be entitled to £1800 – but you’d have to prove that you paid for this long.  Saving your bank statements for such an eventuality would be a wise decision.  Even if you never had a packaged bank account there could be all kinds of things you did purchase that could become eligible for a refund in the future.  For instance flights from years ago that were delayed can be eligible for a payout today.  With the PPI scandal people were able to claim compensation for products taken out over 20 years ago as they had kept bank statements proving what they had paid.  Those who were unable to prove this sometimes were unable to claim if the loan provider deleted old records.

Worried about the clutter bank statements create, or the security issues of keeping them in your home?  Scared that your family will discover that you had to take out payday loans years ago?  Consider scanning your statements in and keeping them securely and privately on your computer.  Virtual or scanned copies of bank statements are still valid legally.  If you’ve already got a scanner, you could do this at home while watching television.  Alternatively there are firms who can scan in documents for you.  Some people with many documents to scan invest in a more automated solution such as a sheet fed scanner, which looks a little like a printer and doesn’t require you to put each page through the scanner individually.  Whatever the solution you go for keep your old bank statements, either virtually or physically.