How to become an ISA millionnaire

Do you ever dream of being a millionaire? It’s reality rather than fantasy for a growing number of AJ Bell customers and achieving this goal isn’t dependent on winning the lottery. It’s not easy to achieve, but it can be done through determination, regular contributions and achieving positive investment returns.

What is an ISA millionaire?

Being an ISA millionaire means having at least £1 million worth of assets in an individual savings account (ISA) such as shares, funds, ETFs and bonds. You don’t have to pay any tax on the gains you make from savings or investments in the account or on any income you receive from these investments.

Browse our learn hub for useful information on ISAs and how to use them.

How do investors become ISA millionaires?

Investors can put up to £20,000 into a Stocks and shares ISA each year. Investing the full amount at the start of each tax year and achieving an annual 7% total return through either capital growth, dividends or both would mean you hit the £1 million ISA jackpot after 22 years, assuming the allowance doesn’t change. It means the ISA millionaires of the future could be more plentiful, and younger.

Who is the youngest ISA millionaire?

Although the average age of an ISA millionaire is 72, the youngest ISA millionaire with AJ Bell is just 36 years old which should give encouragement to anyone squirreling away as much as they can into their ISA to achieve a seven-digit figure.

Top tips for your ISA millionaire journey

It’s good to have a goal when you invest as it acts as an incentive along the way. For those looking to hit the jackpot and become an ISA millionaire, the journey might take a while but the path you follow can be similar to those aiming for a smaller target.

1. Start as early as you can

Time in the market is important, not just so you can ride the market ups and downs but also to let your wealth build up.

Not everyone can afford to invest the full £20,000 ISA allowance each year, particularly younger people who might be on a lower salary. The trick is to start as early as possible with what you can afford to invest. Increase your contributions as you get older and hopefully earn more money.

2. Maximise your contributions

Try and invest as much as you can each month once you’re sure all the essentials are covered. Create a budget so you can pay bills in full and clear any expensive debt, such as personal loans or credit cards charging double-digit interest rates. The remaining money can be used to fund your lifestyle and to top up your ISA.

Little sacrifices along the way could help you hit your ISA goal quicker. You should also consider increasing the amount you invest every time you get a pay rise.

3. Be consistent with contributions

Ask a personal trainer for advice on getting fit and they will inevitably say it is down to the consistency of your programme. Keep going to gym to develop those muscles and technique and the results will shine through. Studying for an exam follows a similar approach – regular revision means the information sticks in your mind and helps you on the big day when you do the final test.

The same principles apply to investing. Feeding your account on a regular basis means you get into the habit of squirreling money away for your future. After a while you get accustomed to that money going into your ISA that you may not even think about alternative uses for it, such as going shopping or down the pub with your friends.

4. Keep an eye on costs and charges

Costs can add up over time and eat into your returns. Try not to fiddle too much with your portfolio as trading in and out of stocks, funds and bonds incurs transaction charges.

It is important to be patient with investing, especially for someone hoping to be an ISA millionaire as the journey to build up this wealth could last for decades.

5. Spread your risks

Having a diversified portfolio is good practice for any investor, including those aspiring to be ISA millionaires.

If something goes wrong with one of your holdings, you’ve got the rest of your portfolio to hopefully act as a cushion to minimise the pain.

Portfolio diversification can involve investing in different industry sectors, geographies and asset types. For example, a diversified portfolio might have exposure to shares, funds and bonds from around the world.

6. The benefits of reinvesting dividends

Companies and funds often pay dividends every three to six months. Think of these as rewards for taking the risk of owning their shares or fund units. While it can be tempting to pocket that income stream to spend on yourself, history suggests one of the biggest contributors to investment returns is reinvesting dividends.

By using the dividend cash to buy more shares or fund units, you are effectively increasing your ownership for free. You’ll own more shares or fund units the next time there is a dividend payment, and hopefully collect an even bigger amount of dividend money.

This concept is known as compounding and is a way of supercharging your journey to becoming an ISA millionaire.

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How do AJ Bell’s ISA millionaires invest?

Today’s ISA millionaires tend to be much more likely to hold shares than the typical investor, holding an average of 87% in shares (including investment trusts), with most of the rest in funds. By comparison, the figure is 33% across other ISA holders.

This perhaps shows two things:

1. ISA millionaires are likely to have been investing for a long time to get to the million pound mark, and are experienced enough to run a share portfolio themselves.
2. You can generate strong returns, potentially ahead of the market, by picking stocks yourself. Of course that’s a double-edged sword, because if you pick underperforming shares, your portfolio will suffer.

Today’s ISA millionaires might have been skillful, or lucky, or a combination of the two.

Oil giant Shell is the single most popular stock among the wealthiest ISA investors. In common with all the other most popular stocks with ISA millionaires, it sits in the UK stock market. Many of these most popular stocks pay dividends and this may well speak to the fact that the average age of our ISA millionaires is 70. This means many of them will be looking to take an income from their investments, which is why they why they have turned to some of the dividend-paying blue chips of the UK stock market.

Investment trusts are also popular with ISA millionaires. Again, some have probably been chosen for their income-producing abilities, such as Tritax Big Box and City of London. However, the most popular investment trust with ISA millionaires is the high-octane growth offering that is Scottish Mortgage. This perhaps hints at another aspect of today’s ISA millionaires: they haven’t been afraid of risk.

This may change a bit going forward as the new higher annual ISA allowance of £20,000 makes it easier to get to the million pound mark without investment growth doing so much of the heavy lifting. When the ISA was introduced in 1999, the annual allowance was just £7,000. However, if you consider that as an example, over 20 years of paying £20,000 into an ISA, total contributions will be £400,000, that still leaves £600,000 to be made up from investment growth to hit £1 million. That’s possible, but less likely if you only choose low risk investments that consequently deliver lower long-term returns.

ISA millionaires have also made use of open-ended funds to grow their wealth. In common with many other investors, it’s passive funds that have proved most popular. Only two active funds make it into the top 10, Fundsmith Equity and Lindsell Train Global Equity, run by two of the most well-known fund managers in the country, Terry Smith and Nick Train. Two gold Exchange Traded Commodities (ETCs) also make it into the top 10, which suggests some ISA millionaires are hedging their bets on the stock market. In 2024, a typical gold ETC rose by 29% in pounds and pence (source: Morningstar), so this has been a pretty lucrative position.

Top ten popular funds, investment trusts and shares with ISA millionaires

Source: AJ Bell, based on AJ Bell customers with more than £1 million in an ISA. Data as of March 2025

Overall, ISA millionaires are a fascinating group and they can teach us a few things about the basics of investing, as well as providing a tantalising glimpse of what’s possible through a combination of regular contributions, patience and perhaps a bit of good fortune too. The most obvious lesson is time is a crucial ally when it comes to investing. Most millionaires tend to be older because they’ve benefited from decades of compound growth and years of contributions.

If you aspire to amass an ISA million, it’s best to get started as early as possible and do so with a ‘get rich slow’ mindset. It’s true there are examples of the opposite — younger investors with a high-risk appetite who have achieved huge returns — but ordinary investors are normally best served by a diversified portfolio held for the long-term.

The holdings of ISA millionaires also demonstrate here is no guaranteed recipe for success. Some investors invest in highly diversified portfolios, while others have just a handful of positions. The important thing is to invest in what you feel comfortable with and understand the level of risk you are taking in return for the potential reward.

Finally, the success enjoyed by the Super Investors helps to illustrate the simplicity of ISAs. A straightforward financial product, ISAs allow you to invest in a range of assets in a single account, without worrying about dealing with the tax headache of income, dividend or Capital Gains taxes. Your total return is free from the taxman so you can invest hassle-free.

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