How you could become one of the growing number of ISA millionaires

Since they were launched back in April 1999, Individual Savings Accounts (ISAs) have become popular tax-efficient ways to save. Any interest, dividends, or returns are protected from Income Tax, Capital Gains Tax (CGT), and Dividend Tax.

A growing number of people are finding ISAs such an effective way to grow their wealth that, according to Yahoo! Finance, the number of ISA millionaires has at least doubled every three years since 2016.

But while ISAs do offer a host of tax benefits, these alone won’t turn you into a millionaire. You do need to do some strategic planning and have the patience to give your wealth the time to grow.

Read on to discover three good habits you can cultivate to help you really make the most of your ISAs and give you more of a chance of reaching the magic million.

1. Consider investing in a Stocks and Shares ISA

The two most popular types of ISA are a Cash ISA and a Stocks and Shares ISA. While both have their benefits, higher long-term rewards are usually found in a Stocks and Shares ISA.

A Cash ISA offers tax-free interest on your savings, and it can be a good way to keep some easily accessible cash reserves for emergencies or to save for a specific big expenditure, like a holiday or a car.

A Stocks and Shares ISA enables you to invest in a portfolio of assets, including:

Stocks and shares in UK or global companies
Funds which track major markets such as the FTSE 100
Company or government bonds, which act as a type of loan with fixed interest repayments.

While it’s not a case of either-or – you can hold both types of ISA – it is a good idea to consider how much you put into each. While a Cash ISA brings some strong advantages, the interest rate on cash savings is nearly always outperformed by the return on investments from a Stocks and Shares ISA.

This is perfectly illustrated by an example exercise carried out by Moneyfarm, which compared a monthly contribution of £100 into a Cash ISA (using the SONIA interest rate benchmark) versus a Stocks and Shares ISA (using the FTSE All-World index).

Their simulation was created for savings and investments between 1999 and 2025. With a total contribution of £31,100, the returns brought the funds to:

Cash ISA – £39,268.80
Stocks & Shares ISA – £147,271.37

The growth from the Cash ISA was not insignificant, and clearly shows there is a good argument for holding some of your wealth there. However, with the investment portfolio showing such a significantly larger growth, a Stocks and Shares ISA is more likely to deliver stronger long-term growth.

The “long term” element is important, as this type of ISA offers much higher potential growth over time, thanks to the compounding effect on returns.

When you earn returns and leave them invested, then future returns will be based on your new, bigger investment. Over the years, this compounding effect can start to deliver significantly higher growth.

Past performance isn’t an indicator of future growth, however, and you need to consider your tolerance to risk when you’re creating your portfolio. Talk to us about how we can help you find the right balance for your investments, based around your own personal approach.

2. Use your full ISA allowance each year

In 2026/27, you have a £20,000 annual allowance which can be spread across the full range of ISAs. However, this is set to change in 2027/28. While the £20,000 allowance will remain the same, if you’re under 65 there will be a £12,000 limit for Cash ISAs, with the remainder reserved for other ISA accounts.

If you’re over 65, there will be no change.

This allowance resets at the start of the new tax year, and you can’t carry any unused allowance across. If you’re looking to become an ISA millionaire, using your full allowance – or as much of it as possible – will be another good habit to cultivate.

The earlier you get into this habit, the better. This gives your investments extra time to grow and to benefit from the compounding effects we mentioned earlier.

3. Take a long-term approach

You won’t become an ISA millionaire overnight and patience is key if you want to see your ambition through. Successful investing needs a long-term strategy which includes:

A well-diversified portfolio

Spreading your investments across a range of asset classes, sectors, and geographical locations means that you’re less exposed to risk in the event of a downturn in the economy or volatility in the market.

Risk tolerance analysis

This means considering your attitude to losses. If you can easily ride these out without undue worry, your portfolio can be built accordingly. However, if losses are likely to be a cause of concern, it’s a good idea to have a more risk-averse portfolio of investments.

Market volatility is not only common but frequent. In fact, according to Schroders, on average the market falls by 15% and rises by 23% annually.

When these falls happen, it’s understandable to feel unnerved. However, cashing out or attempting to time the market can damage your long-term wealth, and staying put is generally the better course of action.

Removing your money even temporarily can start to dent growth; cash savings are at the mercy of inflation and can quickly start to lose their real-world value.

Get in touch

Growing your wealth to become an ISA millionaire is a strong aspiration and we can help you develop a strategy to support this aim.

Investing is a highly bespoke activity, and together we can create a diversified portfolio of investments which reflect your tolerance to risk.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330.

As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, we can assure you that we’re a bona fide company providing excellent advice and high-quality service.

Please note

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

The Financial Conduct Authority does not regulate tax planning.