The number of ISA millionaires in the UK has surged by more than 50% in a single year to reach a new record high of 7,730, according to official HM Revenue and Customs (HMRC) data.
Figures obtained through a Freedom of Information (FOI) request by smart money app Plum show that 2,660 new investors joined the seven-figure ISA club during the 2023-24 tax year, representing a 52% jump from the 5,070 millionaires recorded on the final day of the previous tax year. This marks the largest annual increase since HMRC began releasing these disclosures in 2016, pushing the total tax-free wealth held by the country's ISA millionaires past £10 billion.
Long-Term Growth in Seven-Figure Accounts
The expansion of seven-figure accounts has been dramatic over the longer term, with the number of armchair millionaires increasing more than 17-fold from just 450 eight years ago. The average ISA millionaire now sits on a pot of £1.35 million, while the UK's top 25 ISA investors hold an average of nearly £12 million each after gaining more than £600,000 in tax-free growth over the past twelve months alone.
Among the total count, 7,300 investors hold pots between £1 million and £2 million, 320 hold between £2 million and £3 million and 40 hold between £3 million and £4 million. Another 60 individuals sit on pots exceeding £4 million, with an average value of £7.7 million each.
Stock Market Investing Drives Wealth
HMRC previously confirmed that each of these seven-figure fortunes was built through stock and share investing rather than cash savings, demonstrating the compounding power of the stock market over time. Will Bryant, director of wealth strategy at Plum, said: "A jump of more than 50% in a single year is really telling. These aren’t people who suddenly saved their way to £1m. It’s the result of years of patient investing, where the growth on your growth starts doing the heavy lifting."
Bryant added: "These investors didn’t reach millionaire’s row by selling every time things got scary. They’ve sat through financial crises, COVID, rising interest rates and tariff worries- all of it. Staying put is harder than it sounds, but it’s time in the market, not trying to time the market, that works."
Meanwhile, analysis from investment platform InvestEngine highlights the stark difference in wealth accumulation between cash and stock market investments. Over the past decade, stocks and shares ISAs delivered average annual returns of 9.64% compared with just 1.21% for cash ISAs.
Impact of Upcoming Tax Reforms
Andrew Prosser, head of investments at InvestEngine, noted that 10 years ago there were 570 ISA millionaires, compared with nearly 14 times as many today, highlighting the potential of long-term diversified investing. "The most important thing is to start early, invest regularly and give your money time to benefit from compounding," Mr Prosser told the Express. "You don’t need to invest the full £20,000 allowance each year to get started."
This gap between cash and stocks is expected to widen further following upcoming tax reforms, which will reduce the annual cash ISA allowance to £12,000 for savers under the age of 65 from April 2027, while keeping the overall ISA allowance at £20,000. These changes make stocks and shares accounts even more critical for long-term wealth building, especially as pensions become subject to inheritance tax in 2027, while ISAs remain exempt when passed to a spouse or civil partner.
Building a Seven-Figure Portfolio
Building a seven-figure ISA portfolio relies on four essential habits, starting with consistently utilising as much of the annual £20,000 allowance as possible. Lord Lee of Trafford became Britain's first declared ISA millionaire in 2003 by maxing out his allowances every year since Personal Equity Plans (PEPs) were first introduced in 1987.
Calculations by Plum show that a saver starting from scratch today who maxes out the £20,000 allowance each year in a stocks and shares account can reasonably expect to reach £1 million in around 22 years, assuming an annual return of 7% after fees. Choosing equities over cash is the second vital step, as stock market wrappers shield both capital gains and dividend income from tax indefinitely, with no ceiling on tax-free withdrawals.
The third rule is to avoid emotional tinkering and attempts to time market fluctuations, with Mr Bryant adding that "the people who’ve done best are probably the ones who set it up and largely left it alone". Finally, Mr Prosser stressed that "charges matter too," noting that "our projections suggest that a one-percentage-point reduction in annual investment returns could delay reaching £1 million by around two years" and cut a potential £10 million portfolio down to £7.3 million over the longer term.
