Equity Research; ISA millionaires

ISA millionaires

According to official data from HMRC and released via a FOI (“Freedom of Information”) request as of November 2025 the UK has some 5,070 millionaires with the average ISA millionaire account of c. £1.34m (excluding the top 50 ISA millionaires) as at end 2023.

This is a significant growth since 2022 when there were 2,010 ISA millionaire accounts. Furthermore since 2016 the ISA millionaire population has grown from just 450 up >1,026%.

In 2025 total amounts held in UK ISAs are c. £726bn including c. £294bn in cash ISAs. The average stocks & shares ISA is worth £65k. There are 22.3m ISA holders with around 1.8m allocating their full £20k annual allowance.

ISAs have come a long way since 1987, when Chancellor Nigel Lawson introduced PEPs the forerunner to ISAs. The PEP/ ISA idea is thought to have originated from the USA its 401k tax free accounts offer similar benefits, but Lawson also wanted an appropriate portfolio ‘holding account’ for investors with shares in the UK privatizations that took place during the 1980s-1990s.

About a decade ago, when online chatter first emerged of ‘ISA millionaires’, it was the considered opinion that ‘Lady Luck’ must have played a significant role in creating this rare investor breed. But the fact that over 5,000 people have now achieved the £1m milestone suggests this has less to do with Lady Luck, (though she is still involved!) but far more to do with investment approach and having the time, inclination and commitment to invest.

The virtues of ‘lifetime investing’ using tax free accounts was extolled in a best-selling book by Baron Lee of Trafford published in December 2013; “How to make a million- Slowly: Guiding Principles from a Lifetime Investing”.

Baron Lee (formerly Tony Lee MP) was the first reported UK ISA/ millionaire.

To briefly summarize his highly nuanced approach, he partly attributed his good returns to his preference for investing in small/ medium sized family companies and companies where directors are heavily invested /incentivized by shares in the companies they run. Baron Lee was an avid reader of investment ‘gossip’, and a Financial Times columnist for over a decade, he attended AGM meetings, met directors of his investee companies and had a very sound understanding of those businesses. Baron Lee invested a total of £125k in PEP/ ISA subscriptions for over a decade.

Whilst neither endorsing nor denigrating Baron Lee’s approach, it is an investment truism that any investor should understand their own approach to investing. If it works, and it did work for him, then it’s a good idea to stick to a successful formula.

Given the fact that inward funding into ISA accounts is limited by the UK Budget, (the current annual allowance limit is £20k has been frozen since April 2018) the accumulation effect of tax free savings for long term investors has been significant. A pound in an ISA is worth more than a pound in your pocket.

What sort of investor has a shot at becoming an ISA millionaire? How is it achievable? What sort of financial and mental commitment is required and for how long? What are the variables?

What sort of investor is required?

There is always a considerable temptation to invest/ divest/ divert funds to other assets or needs. The ISA investor must basically ‘stay on track’ remaining committed to making ISA contributions whilst respecting valid competing and rival needs. This can be a very big ask in terms of its mental commitment.

Another requirement is a basic understanding of financial cycles, markets and investments. A lack of financial awareness can undermine the mission. This can be tackled by financial homework. Investors of a certain age have experienced numerous ‘investing cycles’ and undergone a learning curve experience as a result. A starter novice investor needs some grounding, and this is premised on a willingness to learn how portfolio investment works.

To some extent, the travails of capital markets, various speculative manias, the manipulations of governments and central banks, the emergence of dubious alternative assets or investment schemes, constitute short term ‘noise’. Noise tends to put off, divert and fluster investors wanting to tread a long term path. Mistakes and poor investment decisions / poor asset allocation are in a similar vein. These will occur but they should not derail the objective of a £1m ISA. The investor needs to have the ability to recover from financial errors and ups and downs, this could be described as financial resilience.

The young investor these days is often a young mortgage free single person dabbling in cryptocurrencies. The Generation Z investor is often a temporary ‘proxy’ investor i.e. one whose objective is to put down a deposit on a home. It is good to have achievable financial objectives be they for the short, medium or long term. However, it is important to distinguish gambling from investing. There are valid reasons why ISAs cannot hold digital currencies and are designed to focus on equities.

The ISA structure now caters for cash investors, property buyers, and those wanting a tax free vehicle for children’s assets. Current ISA structures provide far more flexibility. Whilst not wanting to exclude cash ISAs altogether, which can offer a cash buffer against unemployment, there aren’t any cash ISA millionaires. The sort of investor must be focused and funding their stocks and shares ISA almost exclusively, and in priority to other ISAs.

To summarise, the sort of investor with a shot at getting to 7 figures, as a rule of thumb needs to be :-

• relatively young (given the timeframe required) i.e. under 30
• gainfully employed, to enable the funding of living expenses and ISA commitments
• financially prudent i.e. not allowing spending/ gambling to imperil the ISA – i.e. not a gambler in crypto currencies or borrowing to invest.
• have some financial understanding, an interest in the subject and an appreciation of investor behaviour.
• Specifically ‘committed’ to the ISA vehicle, willing to commit time, effort, which may involve financial research and management.
• Possessing self confidence and a belief in the mission objectives.

How long does it take?

If we assume:-

• The ISA investor maxes out his/her investment subscription for as long as it takes for his/her ISA to reach £1m then we are looking at an extended period of 20-25 years of investment funding i.e. a capital investment totaling £400k – £500k spread over 20-25 years.
• An annual portfolio return of 7% (dividends and gains are reinvested)
• No withdrawals
• Very low portfolio charges (encompassing trading / account expenses encompassing data, research, administration charges)
• No changes in fiscal treatment of ISA account

According to our calculations, it takes 21.5 years to get to a £1m portfolio assuming a 7% return.

So let’s change the return assumptions a bit, and assume a 5% annual return. In this scenario an ISA with £500k (25 years) of invested capital would take 25 years to get to £1m value.

Clearly the investment period has an inverse relationship with the investment return. A longer investment period is required if returns are lower.

The above data is good guidance assuming linear (‘in a line’) capital market returns. In the last 5 years capital market returns have been non-linear and sensitive to shock events and volatile. Haven’t they always? Yes. Returns are smoothed out considerably over a 20 year period.
That is why a £1m ISA objective will need to be mentally prepared to fund a 20 year commitment irrespective of down markets.

The ISA in allowing tax free growth, i.e. not having to finance HMRC payments in respect of dividend income should create a very large pot of tax free capital that can be used to supplement income if needed at a later stage.

Becoming an ISA millionaire is certainly an achievable long-term project but one that will require a significant chunk of most people’s lifetime earnings.

Important note – tax treatment depends on your individual circumstances and may be subject to change in the future.

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