Two days ago I wrote about iPhone security but failed to mention a couple of extra steps now available in the latest iOS. I'm grateful to Lifehacker for this additional information to make your data more secure.
In the Password Lock option in Settings/General it is now possible to enter a stronger password by switching off the Simple Password option. This releases you from the basic four-digit limit.
When you do this you are presented with the keyboard so you can, in theory, set any sort of alpha/numeric/symbol combination. However, you'll probably be happy enough with a longer numeric password. I am using six digits which I think is adequate. If you do stick to numbers you will find that on opening the phone you still see the large numeric keypad rather than the keyboard. It's thus very simple to enter the six digits.
As a further precaution, I suggest turning on the Erase Data option. This gives you ten attempts to get the password right. As the owner, you're very unlikely to need ten goes – but a thief would keep on trying with the result that your phone would be wiped. As long as you sync your phone once a day you can always rely on a restore from a recent backup.
Finally, don't forget to turn on the Find My Phone and Remote Data Wipe feature in the iTunes options for your device.