UK has around 2,000 ‘Isa millionaires', figures show

The UK has around 2,000 “millionaires“>Isa millionaires”, sitting on pots worth an average £1,412,000, HM Revenue and Customs (HMRC) figures show.

Within the total, around 60 investors hold pots amounting to more than £3 million, according to the data obtained by InvestingReviews.co.uk.

And about 80 pots were valued at £2 million-plus.

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 average pot in the £3 million-plus bracket was found to be just over £6 million – meaning some savers are likely to be sitting on significantly bigger sums.

InvestingReviews.co.uk believes the Isa millionaires to be stocks and shares holders.

Stocks and shares often perform more strongly over the longer term than leaving money in cash, although the value of investments can go down as well as up.

Savers’ money held in Isas is ringfenced from the taxman, for as long as it remains within the Isa “wrapper”.

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.

Isa season, when providers launch a range of new deals, traditionally takes place in the run-up to the next tax year (April 6).

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 be raking in almost half a million pounds a year in tax-free cash, while anyone who did so without the Isa wrapper will be getting a spanking from the taxman.”