The number of ISA millionaires is set to have trebled over the last three years, according to analysis of recent HMRC data.
Wealth manager Rathbones predicts there could be 17,600 ISA millionaires by April although recent market turbulence may have set back some investors.
The data, obtained through an FOI request to the HMRC, reveals that at the start of the 2023/24 tax year, 5,070 people owned ISA portfolios worth £1m or more.
A further 48,160 individuals had ISA holdings between £500,000 and £750,000, 9,430 had between £750,000 and under £950,000 and 1,210 were on the cusp of ISA millionaire status, with ISA portfolios worth between £950,000 and £1m.
Rathbones’ analysis suggests the number of ISA millionaires could rise to around 17,600 by next month – up from the 5,070 in April 2023 – assuming 8% annual investment growth and full use of the £20,000 ISA allowance each year. Under higher return assumptions, the number could be further.
The figures assume uninterrupted saving behaviour, with investors close to £1m gradually crossing the threshold over the three‑year period.
Historically, the number of ISA millionaires has at least doubled every three years since 2016, and more than trebled during periods when the MSCI World returns exceeded 15%.
ISA Millionaires growth compared with MSCI World returns
|
Year |
Number of UK ISA millionaires |
ISA 3yr Change |
MSCI World 3yr Perf |
Annualised return |
|
2023 |
5,070 |
242.6% |
55.2% |
15.8% |
|
2022 |
4,850 |
142.5% |
48.3% |
14.0% |
|
2021 |
4,070 |
242.0% |
52.7% |
15.1% |
|
2020 |
1,480 |
100.0% |
11.9% |
3.8% |
|
2019 |
2,000 |
344.4% |
53.7% |
15.4% |
|
2018 |
1,190 |
|
|
|
|
2017 |
740 |
|
|
|
|
2016 |
450 |
|
|
|
Source: Rathbones. Performance data from 6 April 2023 – 28 February 2026.
With global equities delivering annualised returns of 17.4% since April 2023, conditions are similar to those previously associated with rapid growth in ISA millionaire numbers, the firm said.
Angela Smith, senior investment director at Rathbones, said: “Our analysis of the data suggests the number of ISA millionaires is likely to have risen significantly over a relatively short period, even on modest assumptions.
“This means many more investors are now benefiting from tax-free growth, income and dividends on seven-figure portfolios.”
She said the not-so-secret ingredients behind building an ISA millionaire portfolio were patience, time, consistently using ISA allowances and avoiding interruptions to the power of compounding.
Rathbones said even if savers stopped contributing to their ISAs altogether after April 2023, an 8% annual return could still lift the number of ISA millionaires to almost 13,100 by April 2026.