The UK now boasts 2,000 ISA millionaires – and the top 60 have pots averaging a whopping £6.2million, official data has revealed for the first time.
HMRC opened its ISA millionaire files following a series of Freedom of Information (FOI) requests by InvestingReviews.co.uk.
Previously unpublished documents reveal there are 2,000 ISA millionaires in the country “to the nearest 10” with average holdings of £1,412,000.
Total ISA millionaire holdings in the UK now stand at £2.8 billion, meaning annual tax free returns to those lucky investors would be more than £200 million-a-year assuming 7% annualised growth.
There are 60 investors in the £3 million+ bracket with the average pot among them standing at £6,199,000.
A Stocks and Shares ISA holder with a £6 million fortune would expect to rake in around £434,000 tax free annually.
Meanwhile, a PAYE employee would need a gross salary of approximately £842,000 to take home the same sum after paying income tax, national insurance and pension contributions.
While HMRC would not reveal the size of the country’s largest pot, the data suggests it is likely there are a handful of “ISA beasts” sitting on pots in excess of £10million.
| Pot | Investor numbers | Average market value |
|---|---|---|
| £1m-1,999,999 | 1870 | £1,227,000 |
| £2m-2,999,999 | 80 | £2,366,000 |
| £3m plus | 60 | £6,199,000 |
Though investor platforms like AJ Bell and Interactive Investor have published their own internal ISA millionaire statistics in the past, this is the first time collated nationwide data has been released by HMRC.
The release comes as we approach “ISA season” – the period when savings providers seek to attract investors who have not yet used their annual tax free allowance.
All 2,000 ISA millionaires are believed to be Stocks & Shares ISA holders. Investors starting from scratch today could expect to reach millionaires’ row in around 22 years by maxing out their £20,000 annual allowance assuming a compounded 7% annual return. However, it would take approximately 34 years to accumulate a £3 million pot, and 44 years to join the £6 million club.
Given ISAs were only launched (as PEPs) by Nigel Lawson in 1987 with just a £2,400 allowance, the data released by HMRC indicates a small number of investors have benefited from supercharged returns over the years.
Among them is Liberal Democrat peer Lord Lee of Trafford who became the UK’s first ISA millionaire holder in 2003 after judiciously maxing out his ISA allowance from the time of their launch.
In a 2015 interview with The Financial Times he revealed his ISA had swelled to £4.5 million. While too modest to reveal his current pot, he is believed to be near the top of the tree.
Currently, there are around 2.7million S&S ISA holders of which 37 per cent are maxing out their allowances.
Millionaire ISAs: How long to save and how they grow
| Pot | Years to save | Expected annual tax free returns | PAYE equivalent |
|---|---|---|---|
| £1million | 22 | £70,000 | £117,000 |
| £2million | 29 | £140,000 | £258,000 |
| £3million | 34 | £210,000 | £395,000 |
| £6million | 44 | £434,000 | £834,000 |
Simon Jones, CEO of InvestingReviews.co.uk, commented: “This is the first time we’ve seen an official breakdown from HMRC on ISA millionaire numbers and it makes for fascinating reading.
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