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Who wants to be an ISA millionaire?

who wants to be an isa millionaire

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It’s estimated that there are over 2,000 ISA millionaires in the UK. With approximately 12 million* adult ISAs being subscribed to in 2020-2021, this means that 0.00016667% of people with an adult ISA fall into this category. Who wouldn’t want to be one of those in this tiny group?

Is this percentage so incredibly small, because the goal of becoming an ISA millionaire is so difficult, or are there other factors at play? Ever since John Lee was first self-declared an ISA millionaire in 2003, the quest to become an ISA millionaire has become much more mainstream and often fantasised by investors across the country.

who wants to be an isa millionaire

What does it take to become an ISA millionaire?

Assuming you are able to make the full £20,000 contribution to your ISA, to become a millionaire you have a few paths you can travel.

  1. You could put your £20,000 into a cash ISA and repeat the process for the next 50 years. Or;
  2. Take your £20,000 per annum and invest this. Assuming a 7% rate of return, it would take 21 years for your ISA to reach £1m. If the markets don’t perform just as well, say 2% over the period you are invested, it would still only take 34 years to achieve £1 million in your ISA account.

But let’s step back a second. Just putting money into an ISA sounds great, but how can we optimise this further and really maximise the opportunity to grow beyond £ 1 million? Let’s start from the beginning.

What are ISAs?

ISAs, or Individual Savings Accounts, are a tax wrapper that protects investments from tax for UK investors. In the current financial year, you can put away up to £20,000 a year in an ISA regardless of income level. 

There are two types of adult ISAs in the UK. A cash ISA where your investments are held as cash. And a Stocks and Shares ISA where you are able to invest in publicly traded companies, index funds and bonds among other things. Any income or investment gains are free from income tax or capital gains tax – no matter how much money you make. 

With the above in mind you can start to see why these might be useful for all of us on the path to financial freedom.

How to become an ISA millionaire – investment strategy

To become an ISA millionaire or a millionaire in general, 3 factors are in play. How much money you invest, what your returns are, and how long you are invested. The short answer to becoming an ISA millionaire is that you should; start early, maximise contributions, invest in the stock market, and reinvest your returns for as long as possible. Easy right?

Maximise contributions

At £20,000 a year, it’s possible that you might be able to fully fund your ISA each year. Doing this early and as frequently as possible is the key to kickstarting your ISA millionaire journey. Most people who fully fund their ISA tend to do this around the financial year end, but spreading this across the year is an equally valid strategy. Many ISA brokers allow you to set up recurring payments via direct debit to do so. £1,666 each month will get you there annually.

Invest in the stock market

Even at modest returns of 2% annually, you will become an ISA millionaire a full 16 years earlier than saving cash alone. At a 7% return, you will save 29 years investing to reach the big £1m. According to the UK Governments annual saving statistics, many of those with greater than £1m saved have well over £2m in their ISAs. This level of value could only be achieved through investing in the stock market.

Start early, and reinvest dividends 

Have you met my old friend compound interest? He’s a heck of a guy. But he takes time to reach his full potential. Start your investments as early as possible. Every year counts towards the total growth opportunity of your ISA. Using our 7% annual rate of return and 21-year horizon, someone who puts the maximum of £20,000 in each year will have a balance of £921,481.78 in year 20. In their 21st year on top of their £20,000 cash injection, £66,613.99 of interest will add to the account. 

After 21 years, nearly 50% of the balance will come from compound interest.

Practice long-term thinking and delayed gratification

The biggest risk to your ISA investments reaching £1m or more is that the money you are saving will be needed for life events along the way. Choosing to set and forget your ISA investments will allow them to grow. A few clients have chosen to go this route and completely “forget” their ISA fund exists except in extreme circumstances. They don’t dip into their ISA for a new car or new windows. They budget and save for them with their monthly budget.

Why aren’t there more ISA millionaires?

ISA’s are a wonder tool for those looking a tax free way to grow their wealth and there will be many people who become ISA millionaires in our lifetime. Overall, the odds though are stacked against people achieving this goal for a number of reasons.

  1. The total investment per year is only £20,000
  2. There is no ability to back pay any missed allowances from the previous years
  3. When faced with the choice of paying into a workplace pension, SIPP or an ISA, many take advantage of the reduction in tax now, over the potential for this later on. 
  4. There’s also just not enough money to fully fund all investment opportunities.
  5. Money from an ISA can be withdrawn at any time and at any age. Personal pensions are protected until age 55, making ISAs more readily available if a need arises.
  6. In 2019-2020, 54% of adult ISA holders had £2,499 or less in their ISA*.


It is of course possible to achieve ISA millionaire status and many will continue to do so. John Lee the original ISA millionaire forewent some pension contributions to fund his ISA. Choices will always need to be made and the opportunity cost of one decision against another considered.

Regardless of what choice you decide to make, saving and investing for your future is always the right decision.


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