New data has revealed an increase in investors with individual savings accounts (ISAs) worth £1 million or more.
The new data from Plum shows 5,070 investors recorded as ISA millionaires in the tax year ending 2022-23. For people investment planning in Cheshire or Oswestry, the figures reaffirm the success of this nationwide tax-friendly strategy.
There has been an 11-fold increase in stocks-and-shares elite ISA investors since HMRC began tracking them in 2016. At the time, there were just 450. Apart from a brief dip during the COVID-19 pandemic, their numbers have continued to grow year on year, increasing by 25% between April 2021 and April 2023. The average ISA pot stood at £1.346 million by the close of the 2022-23 tax year. The top 25 ISA-invested millionaires held assets worth an estimated £11.3 million on average, a rise of over a quarter over 12 months.
With an average age of 72, these ISA investors are people described as making money without taking huge risks. Most trade infrequently, hold an international portfolio and lean towards active funds. Many hold a diverse pool of global funds or portfolios rather than single shares.
As matters stand, stocks-and-shares ISAs are still exempt from inheritance tax when bequeathed to a spouse. An individual is able to pay a maximum of £20,000 into a tax-free ISA each year, with dividends and capital gains also exempt. Taking this top figure, someone starting a stocks-and-shares ISA today might expect to become a millionaire in 22 years’ time.
