Proof of Funds - old savings. Is PoF a system that Martin needs to look at.

jnorth55

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

Can I ask the people who are replying with 'I don't believe this' or 'Is there anything else going on' to try something; simply, for a minute, accept that what I've said is honest & there's nothing else going on. If you do that you might understand that there is a problem with the system because if anyone is asked for a bank statement or wage slip from more than 10 or 20 years ago it is almost impossible to get a copy & as I mentioned already, the advice used to be to not keep such documents for more than a few years. 

But some of us have professional involvement in the "system" and it isn't ringing any bells as a typical issue. It's utterly routine for six-figure sums to be produced to solicitors for purchases (often from "the bank of mum & dad"), and it would be ridiculous for solicitors to be expecting proof of funds going back decades. So while I don't particularly doubt the veracity of what you're saying here, it sounds very very odd and doesn't demonstrate a general problem with the "system".

Given that it can cause delays also, especially if a buyer has to try different solicitors, wuldn't it be an idea to have a system that someone could use to go through the checks before putting a bid in or getting a solicitor involved. 

There's nothing stopping you from checking upfront with solicitors what they'll need. Obviously there's a risk that might itself arouse suspicion, but generally I would expect them to give you a good idea of what evidence they'll require.

I'm not talking about that. Anyone can establish what kind of proof might be requested & should so they can prepare. What I'm talking about is a way for the checks to be done without having to go through the process of getting one solicitor after another involved. A centralised system where all the proof someone has is submitted & any clarification sought if needed & then a certificate of proof is given. 

All that's likely to do is push up the costs for everyone, as well as slow things down for the vast majority of cases where there isn't any significant enquiry required.

if there was an online system that, at least, checked the information held by various official departments & banking to verify some level of stable standing it should take minutes & not cost much at all.

Who's setting that up and at what cost?

Bear in mind that many financial institutions have enough trouble getting their own legacy systems talking to each other, never mind creating some online way to extract current and past accounts from everywhere (and verify that it's the same jnorth55 who held all those accounts and is the same one the current enquiry is about).

No one would need to as it already exists. Its the same system that solicitors use to do the checks & also is used by credit checking companies & indeed other sections of the financial industry. The point would be to remove the way solicitors sometimes don't understand or refuse reasonable explanations. What I'm getting at there is that there are ways to tell if there is 'unusual' activity that are much reliable & would make the system fairer.

jnorth55

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

Apologies for venting in reply to your comment, but I am frustrated with the replies that don't seem to understand what has been said. I am not talking about solicitors thinking there is something to flag, simply that they ask for proof of source of funds & when I, & lots of others, say the money is from decades ago & they don't have pay slips or whatever the solicitors won't budge, even though the rules clearly allow them the leeway to take a more nuanced approach & use other ways to establish good standing etc. 
This issue isn't only about my situation, there are lots of similar stories simply because the guidance is based on the idea that solicitors will have an understanding of how saving can build up & we are increasingly in a situation where to have any savings of note is less normal & to have enough to buy without a mortgage is something I've found some solicitors automatically think is odd unless you happen to be very, very wealthy.

jnorth55

Keep_pedalling said:

This does not reflect my experience at all. We had to provide proof of funds for substantial deposits we gifted to our children for house purposes, and all we had to do was provide statements from or S&Ss ISA prior to the gifts and one from our current account showing the amount transferred from those ISAs and the payments going to our children.

Last year we downsized and when we put an offer in on a bungalow before our house was on on the market market we did so as cash buyers because we thought there was a risk that that the offer would not be excepted otherwise. Again all we had to do was provide statements from our ISAs. These were recent statements but  did contain dates individual funds were purchased. We were never asked the origin of the money which would have been a combination of saving and inheritance. 

As it turned out we sold our house within 5 days of going on the market to a cash buyer who again had no problem in providing proof of funds. 

Thanks. It's good to know some people are going through the system ok. All I can say is that I didn't invent the problem & there really isn't any reason why it has happened to me. I've never had any other financial problems & am in good standing with all financial institutions I deal with. I have simply found that buying with cash in this area of the country seems to be something that solicitors have always asked for proof of source of funds & whilst I can supply that for interest & any savings up to around 10 years ago, further back is the issue. It's probably unusual for someone to have the amount to buy with cash that they've had for a few decades.

user1977

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

Can I ask the people who are replying with 'I don't believe this' or 'Is there anything else going on' to try something; simply, for a minute, accept that what I've said is honest & there's nothing else going on. If you do that you might understand that there is a problem with the system because if anyone is asked for a bank statement or wage slip from more than 10 or 20 years ago it is almost impossible to get a copy & as I mentioned already, the advice used to be to not keep such documents for more than a few years. 

But some of us have professional involvement in the "system" and it isn't ringing any bells as a typical issue. It's utterly routine for six-figure sums to be produced to solicitors for purchases (often from "the bank of mum & dad"), and it would be ridiculous for solicitors to be expecting proof of funds going back decades. So while I don't particularly doubt the veracity of what you're saying here, it sounds very very odd and doesn't demonstrate a general problem with the "system".

Given that it can cause delays also, especially if a buyer has to try different solicitors, wuldn't it be an idea to have a system that someone could use to go through the checks before putting a bid in or getting a solicitor involved. 

There's nothing stopping you from checking upfront with solicitors what they'll need. Obviously there's a risk that might itself arouse suspicion, but generally I would expect them to give you a good idea of what evidence they'll require.

I'm not talking about that. Anyone can establish what kind of proof might be requested & should so they can prepare. What I'm talking about is a way for the checks to be done without having to go through the process of getting one solicitor after another involved. A centralised system where all the proof someone has is submitted & any clarification sought if needed & then a certificate of proof is given. 

All that's likely to do is push up the costs for everyone, as well as slow things down for the vast majority of cases where there isn't any significant enquiry required.

if there was an online system that, at least, checked the information held by various official departments & banking to verify some level of stable standing it should take minutes & not cost much at all.

Who's setting that up and at what cost?

Bear in mind that many financial institutions have enough trouble getting their own legacy systems talking to each other, never mind creating some online way to extract current and past accounts from everywhere (and verify that it's the same jnorth55 who held all those accounts and is the same one the current enquiry is about).

No one would need to as it already exists. Its the same system that solicitors use to do the checks & also is used by credit checking companies & indeed other sections of the financial industry.

No, there are online products that can verify your ID (which are frequently used by solicitors for that purpose) and tell prospective creditors what your credit history is like - there's nothing which is going to verify where the funds in your savings accounts came from.

SiliconChip

jnorth55 said:

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

This issue isn't only about my situation, there are lots of similar stories...

You keep repeating this but everyone else on the thread is telling you that it's not something that's happening to most people. I'm sure you have found other people who have experienced the same issue as you, but nobody else here thinks that it's a widespread issue, as shown by the fact that the vast majority of people are able to succeed in purchasing a property. I'd ask some other solicitors what their procedures are and pick one who doesn't require such onerous checks.

silvercar

jnorth55 said:

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

Apologies for venting in reply to your comment, but I am frustrated with the replies that don't seem to understand what has been said. I am not talking about solicitors thinking there is something to flag, simply that they ask for proof of source of funds & when I, & lots of others, say the money is from decades ago & they don't have pay slips or whatever the solicitors won't budge, even though the rules clearly allow them the leeway to take a more nuanced approach & use other ways to establish good standing etc. 
This issue isn't only about my situation, there are lots of similar stories simply because the guidance is based on the idea that solicitors will have an understanding of how saving can build up & we are increasingly in a situation where to have any savings of note is less normal & to have enough to buy without a mortgage is something I've found some solicitors automatically think is odd unless you happen to be very, very wealthy.

So we said accumulation of many years of savings and the solicitors were happy with that. Sizeable deposits in 2 cases with a different solicitor in each. This was for gifted deposits for our kids buying their first home. The solicitors were more concerned that we had had independent legal advice to understand that a gift was a gift. Proof of funds was a savings account linked to our mortgage, that had genuinely been saved for over many years. When it came to transferring the deposits, we transferred directly to the solicitors’ client accounts, they were happy as long as they came from accounts in our name. This was in 2022 and again in 2024, so fairly recent.

jnorth55

Herzlos said:

Since this came up 5 years ago, I'm assuming that you kept bank statements since to show that the money in your savings has been there for at least 5 years now? Are they saying that is insuffient and they need you to prove that you were paid it by a now-defunct company from the 80's? 

Is there anything unusual about where the money is? It's too old for Crypto, but is it offshore or in some unconventional saving/investment mechanism?

It seems pretty unreasonable they'd need to go back further than records are kept (6 years) for something as mundane as, say, £100k in an ISA or Premium Bonds. 

I have explained all this already. I have statements etc. going back lots of years, 10+ for example & all the savings are in standard bank savings accounts. The problem, as already explained a number of times, is 'proof of source of funds' when its to do with the savings from decades ago. 
I didn't mention £100k but I did say that this is about buying a property with cash, so it is more than that. 

Herzlos

jnorth55 said:

Herzlos said:

Since this came up 5 years ago, I'm assuming that you kept bank statements since to show that the money in your savings has been there for at least 5 years now? Are they saying that is insuffient and they need you to prove that you were paid it by a now-defunct company from the 80's? 

Is there anything unusual about where the money is? It's too old for Crypto, but is it offshore or in some unconventional saving/investment mechanism?

It seems pretty unreasonable they'd need to go back further than records are kept (6 years) for something as mundane as, say, £100k in an ISA or Premium Bonds. 

I have explained all this already. I have statements etc. going back lots of years, 10+ for example & all the savings are in standard bank savings accounts. The problem, as already explained a number of times, is 'proof of source of funds' when its to do with the savings from decades ago. 
I didn't mention £100k but I did say that this is about buying a property with cash, so it is more than that. 

What I mean is that it's relatively normal for folk to have savings accounts with more than £100k in them for more than 10 years. That in itself doesn't seem odd. 

What may be odd if you had, for arguments sake, £100m in a South American savings account that you were trying to use to buy a house in the UK. 

You're being very cagey about details and drip-feeding, so we've got a lot of gaps to fill in. All we know is that you've got between £100-400k in savings account(s) that were earned 30+ years ago, and paperwork going back at least 10 years. That all sounds completely normal and wouldn't cause the kind of scrutiny you're seeing. 

As alluded to earlier, and as people have mentioned that normally to provide simialr figures to yours they've only needed evidence that it's been in savings for a while. It's very unusual for anyone to need to provide proof of payment from 40 years ago. I'd go so far as to say it'd be unusual for anyone to have any paper trail more than about 10 years old.

What we're trying to figure out is if there's something you're not noticing or telling us that's causing it to flag up as suspicious. 

Going back to your previous post, to see if we can pick anything out of it:

"I'm in my 60's & worked in an industry at quite a high level for a shop chain & then another part of the industry through the 80's & 90's - both companies that haven't existed for a long time now. I then ran my own business in the same industry & was saving to try to buy a house without a mortgage. I then had a bereavement which meant I inherited a house & to be honest I thought I'd live there for rest of my time.

So, basically I have savings going back more than 20 / 30 years, long before the AML checks came in in 2017 & whilst I have the most recent few years records of transferring accounts etc. I didn't keep older records after the usual 6 years thing.

Conveyancers keep telling me that as I can't provide proof of, for example, wage payments decades ago that's a problem. Likewise I sold off a lot of personal possessions a few years ago & can't provide proof of all of those transactions as it wasn't done via Ebay etc. (specialist collectors items etc)."

Why would they care about any of that? Did you have an exceptionally high income in any of the jobs?

How much are you talking about having sold the specialist collectors items for?

Herzlos

What proof are they actually asking for? 

Pay statements for a particular time period?

Proof that you sold something for a particular price?

Is it a specific request or just a general case of asking you to provide the evidence for the whole savings?

fistfulofsteel

I'm considering DIY conveyancing to get around this issue. I'm buying into a property for £100k cash and tbh I don't know where exactly the money came from as bank statements don't go back far enough. I know I've been self employed and filling tax returns since 2012, but HMRC doesn't allow you to access them beyond a few years. I think my higher earning years were around the mid 2010s and recent years have been just enough to cover my very low living costs. I had some money (don't know how much) before I started work from a mixture of parents putting every birthday/Christmas gift since I was a baby into savings and not spending all my student loan but don't have records. I remember being given a few thousand after my grandmother died in the mid 00s but there's no family left to ask, and again, bank records don't go back that far. I remember I made a few thousand buying a tiny amount of bitcoin, forgetting I had it for years, and then selling it on an exchange that no longer exists sometime in the late 2010s. I move my savings every time an interest rate falls or a better deal comes on the market and didn't realise I needed to keep records, so I don't have access to old statements or even know the account numbers of closed accounts. I've changed email address, postal address and even my name since most of the money came into my possession.

I know I have the money mostly as a result of the wonder that is compound interest but no idea where to start in proving it. My income is currently very low, so bank statements show I'm taking money out of savings each month rather than putting it in.

MSE has all these pages encouraging you to switch savings accounts but no warnings that you need to keep records or you won't be allowed to spend the money later.