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