Hundreds of people have become ISA millionaires as Britons gained financial success through tax-free savings. Some 852 people have reached the lofty goal with interactive investor, with 66 percent of these men, and 34 percent women.
One ISA millionaire, a 58-year-old from South West England who wished to remain anonymous, shared their journey to success with interactive investor.
They said: “I knew I was not going to have a defined benefit pension. I would have to provide my own retirement.”
It was this knowledge which sparked the individual to begin saving into what was known as a Personal Equity Plan (PEP).
This was a savings scheme which allowed Britons to save a maximum £3,000 to help people boost their savings.
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When PEP was replaced with the ISA in 1999, the allowance started at £7,000 and gradually increased before it reached £20,000 in 2017.
The millionaire continued: “I started by maxing out in the PEP scheme, and then investing what I could when it became the ISA.
“I have a family and children, so there were years when I couldn’t save anything.
“It took me 30 years of saving to get to £1million, and I reached this milestone in 2021.
“My retirement is sorted but I am still working.”
But it wasn’t just saving which helped the person become an ISA millionaire, as they were particularly savvy with their investments.
They explained: “Buy and forget has been my approach. I tend not to trade too much and have focused on building positions in core investment trusts, and putting in money when I had it rather than drip feeding money in every month.
“Good quality funds and shares do all the work for you. I have always been able to approach saving with a very long-time horizon.
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“I don’t understand people who have short time horizons. When you feel most inclined to sell, it is the worst time to sell and the best time to buy.
“When the stock market is ‘dead’ in the papers, then that is a time to buy, but this is very hard to do.”
Investment means capital is at risk, and a person could get back less than they originally put in.
As a result, it is not right for everyone, and it can be important to seek financial advice before embarking upon this journey.
Myron Jobson, senior personal finance analyst at interactive investor, shared insight for those hoping to reach this milestone.
He said: “The early bird gets the bigger worm it seems when it comes to ISA investments.
“That’s because more of your assets are working for you for longer.
“There will be inevitable market timing risk, and that’s why a long-term view is crucial. But it seems to be working for ISA millionaires.
“But whether early bird or last minute, the main thing is to take advantage of the ISA wrapper, regardless of whether you are able to use the full amount – and £20,000 a year takes some investing.
“Another good option is to drip feed your investments on a monthly basis to help smooth out some of the inevitable bumps in the market.”
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