Number of Isa millionaires trebles to 17,600 in past three years as Britons make full use of tax-free accounts
number Jesus Exclusive data from Rathbones for This is Money reveals that the number of millionaires has increased significantly over the last three years.
A Freedom of Information request to HMRC previously revealed that 5,070 people held Isa portfolios worth £1 million or more at the start of the 2023/24 tax year.
But a new FOI for asset management firm This is Money shows that 17,600 investors are likely to achieve legendary Isa millionaire status by the end of this current tax year, which ends in two weeks.
The data shows 48,160 people have Isa assets worth between £500,000 and £750,000 in 2023/24, with 1,210 people on the verge of Isa millionaire status worth between £950,000 and £1 million.
Now, new analysis from Rathbones suggests the number of Isa millionaires will rise to 17,600 by April 2026, assuming annual investment growth of 8 per cent and the full use of the £20,000 Isa allowance each year.
The number could rise even further under higher return assumptions.
The figures assume that investors with close to £1 million gradually exceed the threshold over a three-year period and demonstrate uninterrupted savings behaviour.
Savvy investors: A conservative estimate puts the number of Jesus millionaires at 17,600 – but the figure could be much higher
Rathbones says historically the number of Isa millionaires has at least doubled every three years since 2016, and more than tripled during periods when MSCI World returns exceeded 15 per cent.
The conditions are similar to those previously associated with rapid growth in the number of Isa millionaires, with global equities returning 17.4 per cent annually since April 2023.
Angela Smith, senior investment director at Rathbones, said: ‘Our analysis of the data shows that, even with modest assumptions, the number of Isa millionaires has increased significantly over a relatively short period of time.
‘This means many more investors are now benefiting from tax-free growth, income and dividends on seven-figure portfolios.
‘Our experience with clients shows that the not-so-secret elements behind building an Isa millionaire portfolio are patience, time, using allowances consistently and avoiding interruptions in compounding power.’
Even if savers stopped contributing to their Isas altogether after April 2023, an 8 per cent annual return could increase the number of Isa millionaires from 5,070 to around 7,100 by April 2024, to around 9,510 by April 2025 and to almost 13,100 by April 2026, Rathbones says.
Under the more conservative assumption of a 5 per cent annual return on investment, the number of Isa millionaires would rise to 12,300 by April 2026 if the allowance were used in full each year, and 9,300 if no further contributions were made.
The growth reflects a strong combination of investment growth, the long-term impact of pooling within the tax-free package and the disciplined use of annual Isa allowances over many years.
However, investors also need to take this into consideration. inflation When I was thinking about making seven-figure pots.
Angela Smith adds: ‘Even after investment gains, £1 million just isn’t what it used to be. To have the same purchasing power of £1m as 20 years ago, investors today would need £1.7m.
‘Inflation is constantly eroding purchasing power; Therefore, savings alone are rarely enough.
‘Investing wisely in assets such as stocks and funds can help deliver returns that outpace inflation and preserve and grow wealth over the long term.’
In recent months, many investment platforms say the number of Isa millionaire clients has increased.
Investment platform AJ Bell announced that the number of millionaires investing in him increased by 74 percent in one year, while the number of Isa millionaires on the Interactive Investor platform increased by 79 percent, from 1,607 to 2,869 a year ago.
Isa millionaires have one thing in common: they all built their wealth through stocks and shares Isas – 94 per cent of Isa millionaires are fully invested in stocks and shares, while the remaining 6 per cent built their £1 million fortune through a mix of stocks, shares and cash Isas.
Angela adds: ‘Many Jesus millionaires didn’t run towards it; many started with Personal Capital Schemes (Peps) long before the advent of Isas.
‘They developed good habits, avoided common pitfalls, and let time and discipline do the heavy lifting.
‘The not-so-secret element of building a great Isa is not perfect timing or extraordinary risk-taking, but patience, time and strict discipline to stay invested and resist temptation or needless tinkering.’
Tips to become a Jesus millionaire? Start early, use salary increases as built-in increases, don’t cut into compounding, use as much of your limit as possible, invest early in the tax year, and choose investments that suit your risk profile and goals.
Tips from Jesus millionaires
This is Money interviewed two Isa millionaires last year to find out their plans to build a £1 million Isa.
Lord Lee of Trafford, the UK’s first Isa millionaire, and Ollie Price, who became an Isa millionaire at 36, have shared their tips and best advice on joining the £1million club.
1. Use your Isa allowance in full
The first step to becoming an Isa millionaire is to maximize your Isa every year.
This can be a struggle for many savers as the Isa limit is £20,000, having been increased from £15,240 in 2017.
HMRC figures show that just 4 per cent of Isa savers are maximizing their Isa. However, those who can achieve this will be on their way to becoming a Jesus millionaire.
‘I’ve been investing since 1987,’ said Lord Lee, ‘early starters like me had an advantage.’
Mr Perry says he used most or all of his Isa allowance to invest each year for 11 years between 2013 and 2024.
2. Learn about investing and what you invest in
One thing Jesus millionaires have in common is that they do their research and believe in the stocks they choose to invest in.
Mr. Perry’s strategy was to focus on selecting individual stocks in sectors he understood, backed by research that he said allowed him to identify high-potential opportunities.
He says: ‘Do some research on investments before you start putting £10 into an Isa.
‘There is a lot of value in understanding how stocks perform, what inflation is and how it erodes the value of money.
Lord Lee is an experienced stockbroker.
> Read more: Investing for beginners
3. Reinvest dividends
When it comes to generating long-term investment returns, compounding through automatic reinvestment of dividends can be a powerful tool.
By reinvesting dividends, instead of receiving the dividend as cash in your bank account, you reinvest the money you would have paid in dividends to buy extra shares in the company.
And this became one of Lord Lee’s main tactics.
4. Be bold for market-beating growth
Isa savers with pots of over £1 million are unlikely to have invested in index trackers over the years. Instead, they’ve had some serious success along the way, and the gains have come from individual stocks.
For example, Lord Lee invested in Cerillion, a telecommunications company, when it was first listed on the stock exchange in 2016.
The share price rose from 98 pence on its first trading day on 18 March 2016 to 1,190 pence today.
Mr Perry invested in technology-driven gambling company Betfair at the start of his investment journey in 2013.
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