As ISA millionaire numbers grow, Labour might rein in the tax-free scheme (Image: Getty)
The figures, compiled by smart money app Plum from HMRC data, showed a 52% jump in ISA millionaires during the 2023/24 tax year, with 2,660 joining the club. The real number is likely to be higher today, but these are the latest figures available. Between them, ISA millionaires hold more than £10billion in tax-free wealth. The top 25 have pots averaging £11.9million each, up £623,000 in a year.
Gordon Brown launched ISAs in 1999, and today UK adults can invest up to £20,000 a year, with returns protected from income tax, dividend tax and capital gains tax. But as tax-free fortunes grow, critics could increasingly portray them as a costly giveaway to the wealthy. Treasury minister Torsten Bell previously floated the idea of a £100,000 cap on ISA portfolios when he was head of the Resolution Foundation think tank.
Back in 2013, Treasury officials explored a £100,000 cap, while the Social Market Foundation said a £15,000 lifetime limit could save the Government £1billion a year. The allowance has remained at £20,000 since 2017. Former chancellor Rachel Reeves did make some changes. She cut the Cash ISA limit for under-65s to just £12,000 from April 2027. But the overall allowance will remain at £20,000, as she aims to encourage younger savers to put more into riskier but more rewarding Stocks and Shares ISAs.
The rules won’t be changing for pensioners, who often favour low-risk cash. Those aged 65 and over can still put the full £20,000 into Cash ISAs or Stocks and Shares ISAs. There is no sigh that Chancellor John Healey will target ISAs in his upcoming Budget, but latest ISA millionaire figures show why savers should make the most of today’s generous tax-free allowance.
So how do people become ISA millionaries? They didn’t do it thanks to a secret stock tip or a lucky punt. Success comes by tucking money early and regularly, then giving it time to grow, while favouring stocks and shares over slow-growing cash.
Will Bryant, director of wealth strategy at Plum, said: “These aren’t people who suddenly saved their way to £1million. It’s the result of years of patient investing, where the growth on your growth starts doing the heavy lifting. That’s the bit people underestimate.”
You need to stick with it through thick and thin, Bryant said. “ISA investors didn’t reach millionaires’ row by selling every time things got scary. They’ve sat through financial crises, Covid, rising interest rates and tariff worries, all of it. It’s time in the market, not trying to time the market, that works.”
Stock markets can fall sharply and investments can lose money, so only invest money you can afford to leave untouched for the long term. Keep accessible cash for emergencies and choose investments that match your attitude to risk and time horizon.
Bryant suggested drip-feeding money into investments rather than trying to pick the perfect moment.
Not everyone can become an ISA millionaire. But regular investing, compounding and tax-free growth can help ISA savers build wealth over time, without handing the proceeds to HMRC.
