3 helpful tips for becoming an ISA millionaire

Building up £1 million worth of assets in your ISA accounts might sound like an impossible dream.

Yet, according to MoneyWeek the number of ISA millionaires in the UK has tripled in three years. In 2022/23, there were 3,180 ISA millionaires, compared to just 1,030 three years earlier.

While this isn’t an easy milestone to achieve, it can be done with determination and consistency.

The main benefit of using ISAs to progress towards your financial goals is that there’s no Income Tax or Capital Gains Tax (CGT) to pay on any interest or investment returns you make.

However, you can only contribute a maximum of £20,000 across all your ISA accounts in a single tax year, and this limit has been frozen until 2030.

So, becoming an ISA millionaire takes time and careful planning. Keep reading to discover three practical tips for achieving this enviable seven-figure sum.

1. Start as early as possible and use your full ISA allowance each year

Remember that your annual ISA contributions are capped at £20,000 (2025/26). What’s more, your allowance resets at the start of a new tax year, and you can’t roll over any unused allowance.

So, assuming the annual allowance remains at £20,000, from today, it would take you 25 years to become an ISA millionaire if you maximise your annual allowance every year, assuming an average return of 5%.

As such, it’s perhaps unsurprising that IFA Magazine has revealed the average age of an ISA millionaire is 74.

That’s why ISA millionaires typically start saving and investing as early as possible.

If you can’t afford to use your full ISA allowance each year, set an achievable savings goal and stick to it. Contributing as much as you can, regularly and consistently, is one of the most effective ways to reach ISA millionaire status – even if it takes a while to get there.

You can always boost your contributions if your financial situation improves, such as if your salary increases.

Also, the earlier you start investing in ISAs, the more time your investments have to grow (more on this later).

2. Invest in stocks and shares ISAs

There are three main types of adult ISA:

• Cash ISA – A tax-efficient cash savings account that pays tax-free interest on your savings.
• Stocks and Shares ISA – A tax-efficient investment account that allows you to invest your money in a wide range of assets (such as stocks, shares, funds and bonds), while shielding any returns from Income Tax and CGT.
• Lifetime ISA – Designed to help people save for their first home or retirement. You can only open this type of ISA until you’re 40, but you can continue saving up to £4,000 a year into it until you’re 50. It offers a 25% government bonus on your savings.

While it might feel comfortable and “safe” to plough all your money into a Cash ISA, this strategy could make it harder to become an ISA millionaire. This is because interest rates on cash are typically lower than potential investment returns from stocks and shares.

Indeed, figures published by MoneyWeek reveal that the average Stocks and Shares ISA returned almost 12% between February 2024 and February 2025, compared to just 3.8% for the average Cash ISA.

Moreover, as mentioned above, the longer you stay invested, the more potential your money has to grow. This is due in part to the powerful effect of compounding returns: “earning returns on your returns”.

In other words, when you earn a return and leave those earnings invested, your future returns are calculated on the new, larger balance.

However, investment returns cannot be guaranteed. So, it’s important to consider your appetite for risk and seeking financial advice before investing in this type of ISA.

Read more: Scared of investing in the stock market? These top tips could help

3. Spread risk by diversifying

You can hold lots of different types of investments in a Stocks and Shares ISA, such as:

• Individual stocks and shares
• Fractional stocks and shares
• Exchange-Traded Funds (ETFs)
• Government and corporate bonds
• Investment trusts.

In addition to these asset classes, there is also a wide range of industry sectors and geographical locations to choose from.

While it might be tempting to put your money in investments you feel familiar with, this could expose you to a higher level of risk.

For example, if you rely heavily on domestic stocks and shares, a downturn in the UK economy could drag down the value of your entire portfolio.

Read more: Overcoming “home bias” could be the key to boosting your investments

In contrast, diversifying your investments across different sectors, regions and asset classes could help you balance risk, as gains in one area could cushion the blow of losses in another.

As such, diversification is a key consideration when planning your strategy for becoming an ISA millionaire.

Get in touch

If you’re determined to become an ISA millionaire, our financial planners in Bristol can help you craft a strategy for achieving this goal in a timescale that suits your circumstances and aspirations.

Email helpme@aspirellp.co.uk or call 0117 9303510.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.