ISA millionaire numbers have soared to a record high of 4,070, latest annual figures show. A Freedom of Information (FOI) request by The Openwork Partnership revealed the number of millionaires tracked by HMRC has almost tripled year-on-year from 1,480.
According to the data, the 50 top investors are sitting on average pots of £8,509,000, while the average ISA millionaire pot stands at £1,397,000. Nearly all millionaires are believed to be stocks & shares investors – i.e. they have been picking their own portfolios rather than relying on third party fund managers.
The latest figures – for April 2021 – were released just three months after the passing of former Chancellor Nigel Lawson who launched ISAs (as PEPS) in 1987 with a £2,400 annual allowance.
Today investors can pay in £20,000 annually with all contributions and gains sheltered from income and capital gains tax.
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The Liberal Democrat peer Lord Lee of Trafford became the first publicly declared ISA millionaire in 2003 after judiciously maxing out his allowance from the time of their launch.
The new overall millionaire figure of 4,070 smashes the previous high of 2,000 millionaires recorded by the taxman in 2019.
ISA millionaire numbers have now increased almost tenfold since 2016 when they stood at just 450.
Setul Metha, Head of Partnership Services at The Openwork Partnership said: “The ISA has not only created thousands of millionaires, but it has also empowered millions of ordinary investors to build a nest-egg alongside their pension. It is perhaps the best tax-free investment wrapper in the Western world.”
Of course, becoming an ISA millionaire takes time, money and a little bit of knowledge. But the rise in personal finance content online – like that provided by The Armchair Trader – means the roadmap to millionaires’ row has never been more clearly signposted.
How do you get to be an ISA millionaire?
A stocks & shares ISA holder consistently maxing out their £20,000 allowance could reasonably expect to smash through the seven figure mark after around 22 years assuming average returns of seven per cent per annum.
“If Nigel Lawson is looking down, then there can be no doubt he will be feeling more than a little chuffed with these figures,” said Metha.