How To: Organise Your Files

Posted on Mar 21 2018 - 9:00am by Samantha Clark

From statements to product guides, it’s hard to know what is worth keeping and what to get rid of. Additionally, if it is worth keeping, how long should you be keeping ‘important’ documents for anyhow? Some seem more obvious than others- throw product guides/guarantees out when you no longer have use for said item. But what about bank statements and closed loans? These seem a little vaguer.

To help rid you of unnecessary waste, we share our guide to organising your files.

Documents to keep a lifetime:

Certificate

It seems strange to say it out loud but without really thinking about it there is certain documentation that needs to be kept for life. These documents, in particular, are crucial and should not only be kept but stored safely but access shared with trusted partners, family members or friends should something happen to you. These include:

  • Birth certificates
  • Marriage certificates
  • National insurance documentation
  • National health documentation
  • Drivers paperwork- licenses, ownership details (including cars sold)
  • Mortgage paperwork
  • Pension documentation

Also in this list we would include:

  • Active life insurances
  • Wills- though we should specify these need to be altered as and when your circumstances change.

How to store them:

Most documentation relating to an individual person should have a dedicated file that should include birth certificates, national insurance information, driving license information, pensions and specific wills and insurances. These need to be stored very safely, away from general documentation, with the location shared with trusted family members/partners.

Mortgage paperwork, unless it contains the deeds to the home, should have its own separate file. If it is for a mortgage product you no longer have, we’d recommend storing these in the attic for safe keeping- although you’re unlikely to need them, you never know (e.g. PPI claim). Saying this, if you really can’t face holding on to the documentation for so long, you could get rid of some documentation (such as statements- we’d still recommend keeping an outline of the product) a minimum of 3 years after the final transaction ends.

Your pension documentation- if you have a private pension- will take up a lot of space; this is because the initial paperwork regarding your pension product is quite extensive and then you’ll have your annual statements which you’ll want to keep hold of.

Other paperwork that may not be seen as critical, e.g. national health documentation that may relate to a hospital discharge, operation etc. we’d recommend storing in a miscellaneous or health file.

The 7 Year Rule

If you’re self-employed, own a business, you’re likely to be familiar with the 7 year rule. This is the recommended period of time to keep ANY documentation relating to your business as HMRC could come back to you within that time period to ask for detailed information that you provided on your tax return. Such documents include:

  • Income- all invoices sent, income received (from all channels)
  • Expenses- including household expenses if you work from home and claim back electricity, water etc. for the purpose of operating your business; as well as any other expenses claimed against the business e.g. car expenses, lunches, staff etc.
  • If a LTD company- all documentation from the moment the company was set up should be kept- this is the only deviation from the 7 year rule.
  • Documentation relating to any benefits, e.g. insurances, phone, dividends, pensions etc.

How to store these becomes quite complex based on the size and processes of your business. Good organisation of these files (with a combination of digital and physical), will not only make completing your tax return more efficient but when it comes to filing away a month or year, it’ll be easier to pull out any information as and when you need it, whether HMRC comes knocking or not.

Minimum 2 years

The 2 year rule applies to all bank statements and documentation relating to bills; however, we’d always recommend keeping hold of any documentation relating to an active product (e.g. electric) until at least 2 years from the last transaction for said product. Should any problem arise, you’ll have the documentation to help support you.

Additionally, with the various claims against banks and other loan agencies, keeping documentation that relates to a loan, bank account, store card etc. indefinitely may not be a bad option. To save on clutter, sign up to online banking and request statements electronically- this means you’ll still have access to the documentation without the need to keep hold of it yourself.

If you have bills that you don’t pay by standing order, we’d recommend making a note of the amount paid and when, it’ll save you having to go through the statements should you need to find out this information.

As for storing…

Have a dedicated file for each bank- I have several accounts with a single bank and organise my files by account and then date order to save having multiple files for different products which can get confusing.

We’d also recommend having a file dedicated to loan products (e.g. loans, credit cards etc.) and organising by who it is with, if multiple, these are then organised in alphabetical order and then lastly in date order.

22 Months

Is the recommended length of time from HMRC (if employed) to keep payslips, P45s etc. The exception to the rule is your end of year tax review which should be kept indefinitely.

Store work related documentation in a work related file, filed by date order or by your works tax year (usually when your holiday starts and stops).

As long as it’s valid

I organise product documentation by room so that it’s easy to store and find as and when I need it. It’s always worth keeping product instruction documentation for the life of a product because you simply don’t know if/when it may come in use.

As for guarantees you may as well only keep hold of the information for as long as the guarantee is valid for.

A Good System

Filing

A good system is imperative when it comes to household documentation; an organised system from the outset saves you time and stress later down the line. Everyone likes to organise differently by there’s my top tips:

  • Invest in a small filing cabinet and strong files- within my filing cabinet I have files for: each utility, for TV license, TV subscription services e.g. Sky, pensions, car (current documentation such as insurance, receipts from work carried out, handbook etc. and files for each room with product documentation/guarantees.
  • Spare a few minutes once a week/month- add newer documents to the front of the folders which also keeps the system in date order. You may find a 2 part letter holder helpful, the first part is for action required and the second part for filing, once the filing segment gets full it acts as a prompt to file it away.
  • Because it is quite difficult to stay on track/on top of your paperwork, always ensure you carry out an annual review. Following the guidelines above, shred unnecessary documents and throw out useless manuals/guarantees. To avoid clogging the filing system, for documents that you’re required to keep for 2+ years (with the exception of lifetime documentation), move them out of the cabinet and bind them with a staple, paperclip or treasury tag and place them in a plastic box alphabetically for storage in the attic or garage- the chances are you won’t need them but should you need access, you’ll find it easier to get hold of what you need without too much clutter.

Do you have any tips for organising files?

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