Money: Stop squirreling - start filing

Conquer your personal paper mountain, says Margaret St John.

Everywhere I look these days, I see an article about clearing out some aspect of your life: your home, your love life, even your body. It was while remortgaging our house that I decided to clear out my financial filing system.

The good thing about my sloppy system was that the information was all there - it was just cluttered up by thousands of irrelevant pieces of paper, but I panicked each time I went to throw something away. What if I needed those cheque book stubs in the future?

I decided to ask a few experts what I must keep in order to have a flexible system.

Mortgage: To apply for my remortgage, I had to supply the following: the last three months' payslips, the last six months' original bank statements; the last three years' annual mortgage statements from my previous lender; my P60 and an employer's reference, proof of my address (a copy of a recent utility bill in my name) and proof of identity (a photocopy of a signed driving license for my present address or a photocopy of my passport).

According to Mark Gordon, sales consultant at John Charcol, the UK's largest mortgage brokers, lenders only require more information if you have gone into arrears. Up-to-date bank statements are the most crucial element of a filing system. NatWest charges a hefty pounds 2.50 per page (pounds 5 minimum charge) to send copies.

Barclays does not charge for copies of personal accounts unless they are asked to go back several years. There is no need to keep old cheque books after a year. My mortgage company said they would not charge me for a copy of my annual statement if I had mislaid it.

Most people now pay utility bills by direct debit. As long as you keep bank statements, throw away statements for gas, electricity and council tax after you have checked them. Credit card statements must be kept for at least a year to check against mistakes and fraud.

Tax: With self-assessment causing so much heartache, a little filing can prevent problems next year. Apart from bank and building society statements, keep dividend vouchers and pension records. If you are employed, keep your P60 and maybe a P11D expenses form from your employer. If you have changed jobs, keep your P45. If you are self employed, records of business earnings and expenses must be kept at least until you receive a balancing statement from the Inland Revenue. Keep all these records for at least a year.

For reference purposes, some advised keeping a copy of the tax return and statements for three years. Cautious types keep these for up to seven years. The Inland Revenue will have a copy of your returns.

Shares: Keep all information for as long as you own the shares - it may be needed when evaluating your Capital Gains Tax liabilties. This includes any free shares you may have received from building societies converting into banks.

Pensions: Keep annual statements and, if you have switched pensions, keep details of all schemes. The same goes for life assurance and anything to do with an endowment or income protection plan.

Insurance: Tricky. The declaration on your application form is of the utmost importance - an insurance company would only ask for relevant paperwork if you had to make a claim. On household insurance policies, Norwich Union advises, for example, to keep receipts for jewellery valuations. Keeping receipts for TVs, stereos and computers after the guarantee date has expired also helps enormously.

Norwich Union advises keeping records from the old insurance company for up to 18 months apart from the account numbers. For car insurance, they advise keeping a copy of the MOT certificate and a copy of the log book if you had been unfortunate enough to have had your car written off. The new insurance company will check a "no claims discount" with your old insurer. However, I was advised to keep recent photographs of the car in case of any disputes over its value if, again, it was written off.

Again, health insurance and life assurance policies very much depend on the accuracy of your declaration, which may require a medical. Better that than the insurance companies refusing to pay out later on. Be vigilant about keeping receipts for treatment.

One final thing - always tell someone (partner, friend or solicitor) where you keep this treasure trove.