New HMRC data reveals the number of ISA millionaires rose by more than half in the 2023/24 tax year, with almost 8,000 individuals now holding portfolios worth over £1 million. The figures come ahead of a Labour Party government rule change in April next year that will cut the annual ISA allowance for under-65s from £20,000 to £12,000, under the leadership of Andy Burnham.
Sharp rise in ISA millionaires
According to HMRC figures analysed by Murphy Wealth, 7,730 people held ISA portfolios worth more than £1 million at the end of the 2023/24 tax year, a 52 per cent increase from 5,070 a year earlier. The number of individuals with more than £2 million in their accounts also climbed 59 per cent, from 270 to 430.
Adrian Murphy, chief executive of Murphy Wealth, said: “It is highly encouraging to see more people making use of Isas and benefiting from tax-free growth, income and dividends. The rapidly rising number of Isa millionaires shows what can be achieved through patience, time in the market, consistent use of Isa allowances and the effects of compounding.”
New allowance rules from April
From April, individuals under 65 will be able to contribute a maximum of £12,000 to cash ISAs, with the remaining £8,000 of the annual allowance available for stocks and shares investments. This change, introduced under Andy Burnham, follows the Labour government's broader strategy to encourage investment in equities.
Murphy added: “This underlines why more people in the UK need to consider investing their savings. Forthcoming changes to Isa rules could accelerate the shift towards investing.”
Experts urge focus on stocks and shares
Will Bryant, Director of Wealth Strategy at smart money app Plum, commented: “A jump of more than 50% in a single year is really telling. These aren’t people who suddenly saved their way to £1m. 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.”
Murphy advised: “If you want to join the Isa millionaire club, you have to build a portfolio of stocks and shares. Ideally, you would do that with the support of a professional adviser who can help you navigate the opportunities and risks involved in investing.”
The data highlights a growing trend of wealth accumulation through ISAs, with the upcoming allowance reduction likely to prompt more savers to consider stocks and shares options. As the April deadline approaches, experts suggest that individuals under 65 will need to adjust their savings strategies to maximise the benefits of the new rules.
