Five steps to becoming an ISA millionaire

As my husband bluntly told me, a million pounds is great, but it’s not necessarily ‘quit your job’ money. When I asked him what would qualify, he pondered for a moment before concluding that a £10 million windfall might do the trick. Good to know we’ll be working for a bit longer then!

For many, the idea of becoming a millionaire seems far-fetched—something that only happens through the lottery or a long-lost relative’s inheritance. But in reality, thousands of UK savers have joined the ISA millionaires’ club simply by investing wisely in the stock market over the years.

The rise of the ISA millionaire

According to Freedom of Information (FOI) requests made to HMRC, there are a record-high 4,850 ISA millionaires in the UK, a tenfold increase since 2016. The average ISA millionaire has a pot worth £1.35 million, while the top 25 hold an average of £8.8 million

ISAs have a significant advantage: they are ring-fenced from the taxman. Investors can pay in up to £20,000 each tax year across the available products, including cash ISAs, stocks and shares ISAs and lifetime ISAs. For those who have consistently maxed out their ISA allowances and invested wisely, the returns have been substantial.

How to invest like an ISA millionaire

So, how does one achieve millionaire status through an ISA? The key factors that ISA millionaires share include:

• Investing in stocks and shares – Growth assets have historically outperformed cash over the long term
• Maximising their annual allowances – Maximising the £20,000 limit year after year
• Starting early – Time in the market is more important than timing the market
• Staying disciplined – Investing through market ups and downs without panic selling and crystallising a potential loss

The average ISA millionaire is 57 years old, demonstrating that wealth accumulation takes time and patience. Their success highlights the importance of a long-term mindset, utilising tax-efficient wrappers, and allowing compounding to do its magic.

How to hit a million

Of course, investing certainly isn’t a guaranteed route to riches. The stock market can be an extremely volatile place and the value of your investments can go down as well as up.

The good news, however, is that there’s plenty you can do to improve your chances of success and limit the potential downside – if you do your research. 

According to our calculations, it’s possible to become a millionaire in just 22 years, if an individual invests their full £20,000 ISA allowance and assuming the annual capital growth is 7% after charges.

Investing for your children 

If you’re a parent (or an aunt, uncle, or godparent), you might wonder about securing your child’s financial future. University fees, housing costs, and retirement savings are all growing concerns. The good news is that children have one major advantage—time.

If you invest the full Junior ISA allowance each year (currently £9,000 per year) for 18 years, at 7% annual return, you’ll be sending them off with a pot of £323,040. However, start 10 years later, and that pot will be worth just £96,149. These savings could cover university tuition, a house deposit, or even kickstart their own ISA millionaire journey.

A final note on tax: if you’re investing for the long term, the impact of tax on your overall returns

becomes more important. It’s a no-brainer to save for your children in your own ISA (if you don’t

trust them from age 18) or in a Junior ISA (where they can access the cash at 18), so long-term returns

don’t get eaten up by capital gains or income tax.

Where do you begin?

If you want to embark on your journey towards ISA millionaire status, here are some key steps to follow:

1. Start investing

The earlier you start, the better. Time allows compounding to work its magic, helping your money grow exponentially over the years.

2. Save as much as possible

While it’s not always easy to find extra cash, small savings can add up. Set up a direct debit to automatically transfer money into your ISA each month. Another tip? Increase your savings contribution each time you receive a pay rise—you won’t miss what you never had.

3. Understand your risk tolerance

Your ability to reach seven figures will depend on your willingness to take on risk. Higher returns often come from investments in more volatile assets, such as emerging market equities. However, be prepared for market fluctuations along the way.

4. Research your investments

A well-informed investor is a successful investor. With thousands of funds available, selecting the right ones can be daunting. That’s where FundCalibre can help. Each of our Elite Rated funds has a dedicated research note explaining its strategy, risks, and past performance. Start your research today.

5. Diversify your portfolio

While the stock market offers great growth potential, it’s important not to put all your eggs in one basket. A diversified portfolio—spread across different asset classes, sectors, and regions—can help smooth returns over time and protect against market downturns.

The Elite Rated funds that would have made you a millionaire

The annual rate of return you achieve on your investments after charges will make an enormous difference to how quickly you achieve your goal.

There are several Elite Rated funds that have been in existence for two decades. If you had been able to invest £20,000 a year for 20 years, six Elite Rated funds (which have had the same manager for the past two decades) would have achieved the desired result*.

Of course, past performance is no guarantee of future success, and investing in a single fund is rarely a good idea. These funds serve as an illustration of how long-term investing and compounding can lead to significant wealth. A well-diversified portfolio, spread across different investment styles and asset classes, can help manage risk while still allowing for substantial growth over time.

Becoming an ISA millionaire isn’t just for the ultra-rich—it’s achievable for disciplined investors who start early, contribute regularly, and stay invested for the long haul. Whether you’re saving for yourself or a future generation, the tax advantages of ISAs make them one of the best vehicles for long-term wealth creation.

Who knows? You could be the next member of the ISA millionaires’ club!

*Source: FE Analytics, total returns in pounds sterling, 29 April 2005 to 31 March 2025