Nearly 5,000 Savers Now ‘Isa Millionaires’ Amid Growing Wealth

According to recent HMRC data, nearly 5,000 savers in the UK have reached ‘Isa millionaire’ status, amassing tax-efficient savings pots of over £1 million. The number of savers achieving this milestone rose sharply from 4,070 in 2021 to 4,850 by the end of the financial year in 2022—an increase of about 20% in just one year.

The data, obtained through a freedom of information request by money app Plum, reveals that the average Isa millionaire now holds around £1.35 million in their Individual Savings Account (Isa). A small elite of 25 Isa investors boasts even larger pots, averaging £8.88 million, underscoring the potential of Isa accounts as a tax-efficient wealth-building vehicle.

Isa Appeal in Times of Change

The rise in Isa millionaires comes at a time when other savings options have lost some appeal, partially due to recent tax changes. Rajan Lakhani, representing Plum, emphasized this unique advantage: “Isa millionaire wealth continues to grow, even as other savings and investment products lose a little of their shine following recent tax changes. A large part of the Isa’s appeal is the flexibility and liquidity it offers investors.”

A Wealth-Building Strategy for Savers at Every Level

Although only a fraction of savers will accumulate £1 million, the Isa remains a valuable tool for long-term financial growth. Lakhani pointed out that even modest, regular investments can accumulate significantly over time, especially when begun early. “Investing even small amounts regularly can add up to a significant sum over time and go a long way to helping people meet their financial goals,” he noted.

For those looking to build an emergency fund, Lakhani also praised the cash Isa’s versatility: “It’s ideal for insulating yourself from future shocks, like a sudden job loss or poor health, or to use for things you need in the shorter term.”

Isa Millionaire Figures: Proceed with Caution

HMRC cautioned that these figures are approximate, noting that some Isa managers may misreport or omit records each year. As a result, the reported Isa millionaire count serves as a guide, reflecting the broader trend of Isa-based wealth accumulation in the UK, rather than an exact count.

With Isa millionaires on the rise, the tax-efficient Isa remains a compelling option for both small savers and high-net-worth investors seeking growth and security amidst a changing financial landscape.