The number of investors with individual savings accounts worth at least £1mn has hit more than 5,000, according to the latest annual figures, underlining the success of the tax-friendly investment vehicle.
A freedom of information request submitted to HM Revenue & Customs by savings and investment app Plum showed that 5,070 investors were recorded as Isa millionaires at the end of the 2022-23 tax year.
The number of stocks-and-shares Isa investors in this top tier has increased more than 11-fold since HMRC first started tracking them in 2016, when there were just 450.
“There’s only been a single annual dip recorded [in Isa millionaires] during that time, which was in 2020 when markets initially went into a major downturn at the beginning of the Covid-19 pandemic,” said Rajan Lakhani of Plum.
Their number increased by almost 25 per cent over the two years to April 5 2023, from 4,070.
The average pot was £1.346mn at the end of the 2022-23 tax year, while the top 25 Isa millionaires had investments worth an average of £11.3mn, up by more than a quarter on the previous year.
“Many may have made decent money by buying the dip after the lockdown stock market drops and waiting for those shares to soar,” said Laura Suter, AJ Bell director of personal finance.
Hargreaves Lansdown, the UK’s largest “DIY” investment platform, said that by the end of December 2024 it had 1,322 stocks-and-shares Isa millionaires among its customers. This was up 14 per cent in the second half of the year. Their average age was 72.
“Most Isa millionaires have built a fortune without necessarily taking enormous risks,” said Kate Marshall, lead investment analyst at Hargreaves Lansdown. “Most of them aren’t speculating . . . while most Isa millionaires traded in 2024, this has tended to be infrequent.”
Most of the platform’s Isa millionaires held a broad mix of international portfolios or funds rather than single shares, with active funds more common among them than in the company’s broader client base, she added.
Conversely, Suter said that some of AJ Bell’s wealthiest Isa investors were often heavily weighted to one stock, with Tesla a popular option.
She cautioned that while such a strategy had paid off for some, having such a heavily concentrated portfolio was a “very risky way to invest . . . [putting you] at the mercy of one stock’s fortunes”.
Stocks-and-shares Isas are exempt from inheritance tax if passed on to a spouse or civil partner. Individuals can pay up to £20,000 into their Isa tax-free every year and will pay no tax on dividends or capital gains.
An individual starting a stocks-and-shares Isa from scratch today who pays in the current maximum annual allowance of £20,000 each year would become a millionaire in roughly 22 years — assuming an annualised return of 7 per cent after fees — according to Plum.
The millionaires in the FOI request built their portfolios predominantly through stocks-and-shares Isas.
Daniel Hough, wealth planner at RBC Brewin Dolphin, said the increase was “no surprise” and that good growth over recent years meant stocks and shares savers “will have been well rewarded for their efforts”.
An analysis published this week by AJ Bell found that a £1,000 annual contribution to a stocks-and-shares Isa since 1999 would now be worth £127,887 if it had been invested in North American funds, or £67,866 if invested in UK equities.
Cash Isa investors would have a fund worth £36,920 or £40,717 if it had tracked annual inflation.
“If the government successfully encourages more people to invest, it’s inevitable we’ll see more Isa super investors and millionaires,” Suter added.
