Is it legal? In terms of simple contract law if it's in the terms and conditions of your contract then perhaps it is legal or, more accurately, the clause/term within the contract is enforceable. However, sticking to contract law, you may argue that, since four years have gone by and no such vetting form has been performed previously, that there is now an implied term within your contract of employment that your employer cannot take such an intrusive investigation. My view is that if such a term is contained in your agreement that it is now at worst challengeable, and at best unenforceable. Your employer, in my view, should have carried out this vetting process regularly if they wish to rely on it.
Going outside of contract law, I would also argue that such an invasive and intrusive check on your finances breaches the provisions of the Data Protection Act 1998 as well as your convention rights - Article 8 of the European Convention on Human Rights (Right to Respect for Private Life). Now, Human Rights are routinely breached quite legitimately, but only when it is necessary to do so "in the interests of national security,public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others". However whilst such a breach may be justifiable to someone practising as a solicitor or accountant, or perhaps, a police officer, it may not be justifiable for civilian police employees. I would argue that in your own case it isn't justifiable given that you have far less powers than a police officer has. Your employer will have to demonstrate that there is a legitimate reason why the caveats to the protection of your human rights should take precedence.