Rise of 1 Millionaires in Singapore as Top 25 Investors Hold £11.3m on Average
The Rise of Isa Millionaires in the UK
The number of individuals who have built a personal investment portfolio worth over £1 million through an Individual Savings Account (Isa) has seen a dramatic increase over the past year. According to data obtained via a Freedom of Information request, there are now 5,070 Isa millionaires, compared to 4,850 in 2022. This represents a significant jump of 220 new members in just one year.
Since 2016, when only 450 individuals had reached this milestone, the number of Isa millionaires has surged by an astonishing 1,026 per cent. This growth is not limited to the number of millionaires but also reflects a substantial increase in the value of their investments.
Growing Investment Pots
The average size of the largest Isa pots has grown significantly. The 25 most dedicated Isa savers now hold an average of £11.3 million each, up from £8.9 million in the previous year. This means that the average pot for these top investors has increased by £2.4 million, or 27 per cent, within a single year.
Of the 5,070 Isa millionaires, 4,800 have portfolios valued between £1 million and £1,999,999. Another 200 investors have pots between £2 million and £2,999,999, while 30 have holdings between £3 million and £3,999,999. There are also 50 investors with portfolios exceeding £4 million.
Factors Driving Growth
Part of the surge in Isa millionaires can be attributed to the rise of artificial intelligence (AI) and the associated stock market boom. Rajan Lakhani of Plum, a financial app, noted that the AI-driven gold rush has contributed to the expansion of the Isa millionaire club, with 220 new members joining in the past year.
The so-called "Magnificent Seven" – a group of leading US tech stocks including Nvidia – have played a key role in boosting the fortunes of UK investors. Despite concerns about an AI bubble, demand for these stocks remains strong. Two-thirds of Plum’s fund buy orders in the third quarter of this year were directed toward the US market or tech giants specifically.
Investing in Stocks and Shares
A fortune of £11.3 million in an Isa is typically achieved through investing in stocks and shares. HMRC data shows that 94 per cent of the 4,850 Isa millionaires in 2022 were fully invested in stocks and shares, while the remaining 6 per cent held a mix of stocks and cash. There are no known cases of cash Isa millionaires.
Tips from Isa Millionaires
This Is Money recently interviewed two Isa millionaires who shared their strategies for building a £1 million portfolio:
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Fully use your Isa allowance
The first step to becoming an Isa millionaire is to max out your annual Isa limit. Currently set at £20,000, this amount was raised from £15,240 in 2017. However, only 4 per cent of Isa savers manage to fully utilise their allowance. Lord Lee of Trafford, the UK’s first Isa millionaire, started investing in 1987, highlighting the advantages of starting early. -
Learn about investing
Isa millionaires often conduct thorough research before making investment decisions. Ollie Price, who became an Isa millionaire at 36, focused on individual stock picking in industries he understood. He advises new investors to research investments thoroughly before committing funds. -
Reinvest dividends
Compounding through dividend reinvestment can significantly boost long-term returns. By reinvesting dividends rather than taking them as cash, investors can purchase more shares, which can lead to exponential growth over time. -
Be brave for market-beating growth
Many Isa millionaires have achieved success by investing in high-performing individual stocks rather than relying on index trackers. For example, Lord Lee invested in Cerillion, a telecoms company, when it was listed in 2016. Its share price has since risen from 98p to 1,935p. Similarly, Ollie Price invested in Betfair, a tech-disruptor in the gambling industry, early in his career.
