The UK has around 2,000 ‘ISA millionaires’, sitting on pots worth an average £1,412,000, HM Revenue and Customs (HMRC) figures have revealed.
Within the total, around 60 investors hold pots of more than £3 million and about 80 pots were valued at £2 million-plus, according to the data obtained by InvestingReviews.co.uk.
InvestingReviews.co.uk released the figures following a series of freedom of information (FOI) requests to HMRC, which gave its most recent data, showing Isa account values in 2019.
The data showed that the average pot in the £3 million-plus bracket was just over £6 million – meaning some savers are likely to be sitting on significantly bigger sums.
According to some estimates, the ISA millionaires own stocks and shares.
Around 60 investors hold pots of more than £3 million and about 80 pots were valued at £2 million-plus, according to the data
Although stocks and shares perform better over the long term than cash, they can be less valuable in the short-term.
The taxman is not allowed to access the money saved by Savers in Isas, as long as the Isa “wrapper” remains intact.
The annual Isa allowance has increased significantly over the years and currently stands at £20,000.
Investors starting from scratch now could expect to reach millionaires’ row in around 22 years by making maximum use of their annual allowance, assuming a compounded 7% annual return, Investing.Reviews.co.uk said.
According to some estimates, ISA millionaires own stocks and shares. The annual Isa allowance has increased significantly over the years and currently stands at £20,000
The Isa season is when providers offer a variety of deals and typically takes place during the April 6th tax year.
Simon Jones, chief executive of InvestingReviews.co.uk, said: ‘As Isa season takes off, this data will focus minds on what can be achieved through patient investing.
‘Hats off to all those canny investors who have grown their pots to £6 million-plus.
“They will make almost half of a million pounds annually in tax-free money, while those who do so without Isa wrappers will get a spanking by the taxman.”