Thousands of savers become ISA millionaires with pots averaging £1.4million
Martin Lewis lays out the best savings deals available
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Data from HMRC has revealed that of this group the top 60 savers have pots averaging an impressive £6.2million. These numbers highlighting how many ISA millionaires there currently are come after a series of freedom of information (FOI) requests conducted by InvestingReviews.co.uk.
Overall, the figures show there are 2,000 ISA millionaires in the UK who have average holdings of around £1.4million.
When it comes to total ISA holdings in the UK, savers have amassed a staggering £2.8billion.
This means that annual tax free returns to these investors would be more than £200million annually, if seven percent yearly growth was taken into account.
According to InvestingReviews, one of the 60 ISA savers with a pot worth £6million would expect to get around £434,000 tax-free every year.
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Comparatively, a regular PAYE worker would need to take home a salary of £842,000 to earn the same amount of money.
This estimate takes into account the employee paying income tax, National Insurance and pension contributions.
Despite sharing this information, HMRC did not reveal the size of the UK’s largest ISA savings pot.
However, the tax body’s figures suggest there could be a small group of “ISA beasts” who are sitting on pots in excess of £10million.
InvestingReviews believes that all of these millionaires are stocks and shares ISA holders.
Anyone who decides to begin investing as of today would not reach millionaire status for another 22 years, calculations suggest.
This would be achieved by maxing out their £20,000 annual allowance if taking into account a compounded seven percent annual return.
This contribution can be separated between the cash and stocks and shares ISAs.
It is estimated it would take approximately 34 years to earn a £3million ISA pot, and 44 years to become one of the select few who accumulate over £6million.
ISAs were only launched in 1987 with just a £2,400 annual allowance, with HMRC’s figures suggesting that a small number of investors have benefited from “supercharged returns” over the decades.
As of today, there are currently 2.7 million stocks and shares ISA holders. From this group, 37 percent are maxing out their allowances.
Simon Jones, CEO of InvestingReviews.co.uk, emphasised why these figures should be considered inspiration to the many ISA savers looking to boost their existing pots.
Mr Jones explained: “This is the first time we’ve seen an official breakdown from HMRC on ISA millionaire numbers and it makes for fascinating reading.
“As ISA season takes off, this data will focus minds on what can be achieved through patient investing.
“Hats off to all those canny investors who have grown their pots to £6million plus.
“They will be raking in almost half a million pounds a year in tax-free cash, while anyone who did so without the ISA wrapper will be getting a spanking from the taxman.”
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